Ford Stock Jumps on Strong Q4 Earnings and 2024 Outlook, News of Special Dividend

Ford (F) shares rose greater than 6% in after-hours buying and selling Tuesday after the corporate reported better-than-expected fourth-quarter earnings, projected sturdy 2024 earnings and introduced plans to return additional cash to shareholders.

Ford posted earnings per share of 29 cents, down from 51 cents a share a yr earlier however greater than double analysts’ expectations. Fourth-quarter income rose 4% to $46 billion, additionally beating expectations.

For 2024, Ford forecast adjusted earnings of $10 billion to $12 billion earlier than curiosity and taxes, in comparison with $10.4 billion in 2023. These projections are on the greater finish of the $10 billion to $10.5 billion the corporate predicted in November when it was hampered by a six-week strike from the United Auto Staff union.

The corporate tasks income this yr of between $8 billion and $9 billion at its Ford Blue unit, which contains gasoline and hybrid automobiles. It sees revenue of $7 billion-$7.5 billion at its Ford Professional industrial enterprise.

Nevertheless, the corporate stated its comparatively small Ford Mannequin e electrical car enterprise is more likely to submit a lack of between $5 billion and $5.5 billion, as pricing pressures within the EV market proceed to weigh on profitability. Losses for Ford’s investment-intensive electrical car unit have grown steadily over the previous yr and totaled $4.7 billion in 2023.

Ford famous in its press launch that “mainstream buyer adoption of EVs (is) taking place at a slower price than the trade anticipated” and reiterated that the corporate is “deferring sure capital investments in EVs till they’re justified by demand and prospects for acceptable returns.”

Nonetheless, in keeping with Chief Monetary Officer John Lawler, Ford is creating subsequent era EVs that the corporate expects will probably be worthwhile inside a yr of launch. “EVs are right here to remain, buyer adoption is rising, and their long-term upside is central to Ford,” he stated.

Ford additionally introduced an everyday first-quarter dividend of 15 cents a share plus a supplemental dividend of 18 cents, to be paid on March 1. The corporate stated it targets distributions to shareholders of 40% to 50% of adjusted free money circulate, which the automaker pegs at between $6 billion and $7 billion in 2024.

Ford shares gained 6.3% to $12.83 in after-hours buying and selling. By means of Tuesday’s shut, the inventory was down about 10% over the previous yr.