Ford Motor Co. late Wednesday swung to a surprise quarterly profit, saying “strong” demand for its vehicles allowed it to forgo discounts on them, and guided for a better 2021 with an improving outlook for chip supplies.
said it earned $600 million, or 14 cents a share, in the second quarter, compared with $1.1 billion, or 28 cents a share, in the year-ago quarter. Adjusted for one-time items, Ford earned 13 cents a share.
Sales rose 38% to $26.8 billion, from $19.4 billion a year ago.
Analysts polled by FactSet expected Ford to report an adjusted loss of 3 cents a share on sales of $23 billion. The stock rose more than 2% in the extended session Wednesday.
The auto maker guided for a better 2021 operating results, “driven by strong order bank (and) improving semiconductor supplies,” it said.
The all-electric version of its iconic F-150 pickup truck has 120,000 reservations since its unveiling in May, about three-quarters of them from customers who are new to Ford, the company said.
“Balancing the need to build and sell models it can produce today with models it needs in the next five years is a challenge every global auto maker is facing. The latest numbers suggest Ford is meeting this challenge,” said Karl Brauer, an analyst with iSeeCars.com.
The company has yet to sell the F-150 Lightning “but that model’s impressive specs have sparked widespread interest and enough advance reservations to create optimism around the company’s ability to succeed in a pure EV world,” he said.
With the chip shortage worsening in April, Ford warned investors its production would take a 50% hit, which would have resulted in a quarterly loss.
“In fact, Ford did better than expected, leveraging strong demand to optimize revenue and profits through lower incentives and a favorable mix of vehicles, which generated companywide adjusted earnings before interest and taxes of $1.1 billion,” the auto maker said.
In May, Ford announced plans to invest in and offer more electric vehicles in the coming years, earning Wall Street praise for having a “coherent strategy” to remain competitive amid the broader industry shift away from gas-powered vehicles.
The stock has gained about 56% this year, compared with gains of around 17% for the S&P 500 index