DETROIT:Ford Motor Co on Wednesday boosted its 2021 profit forecast after reporting better-than-expected quarterly results.
The No. 2 U.S. automaker raised its full-year operating profit estimate by about $3.5 billion, to between $9 billion and $10 billion.
Ford shares rose 2.6% to $14.22 in after-hours trade.
Ford estimated a roughly 30% increase in global sales to its dealers from the first to the second half of the year. However, higher commodity costs, investments in the company’s “Ford+” plan and lower earnings by Ford Credit is expected to reduce operating profit in the second half, it added.
The company reported an operating profit of $1.1 billion, and boosted its full-year forecast for adjusted earnings before interest and taxes to between $9 billion and $10 billion.
Net income dropped to $561 million from $1.1 billion in the year-ago quarter. Revenue climbed to $26.8 billion from $19.4 billion over the same period.
Ford lost ground in most of its major markets. In North America, its share dropped 3.8 points to 10.4%, and in Europe it fell 1 point to 6.1%. China was down a fraction to 2.3%, while South America slid 4.2 points to 2.3%.
Automotive revenue in North America jumped 37% to $15 billion, with lower costs and sales focused on more expensive, higher margin vehicles such as pickups and SUVs. Revenue in Europe climbed 55% to $5.6 billion, but fell 31% to $600 million in China.
Ford suffered operating losses in most major markets, except North America, where earnings before interest and taxes totaled $194 million, reversing a loss from the previous year.
The company lost about 700,000 units of production in the quarter, as expected, but remains optimistic about the second half.
“We’re spring-loaded for growth,” Ford Chief Financial Officer John Lawler told reporters on a conference call.
He cited a healthy bank of orders for recently introduced models such as the Mustang Mach-E and Bronco, and upcoming launches including the F-150 Lightning and Maverick compact pickup.
The company said it expected working capital to rise in the second half as vehicle production increases with better availability of semiconductors.
Ford estimated full-year adjusted free cash flow of between $4 billion and $5 billion.
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