+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

Ford's stock drops 6% in after-hours trading after releasing third-quarter earnings

Oct 29, 2024, 16:56 IST
Business Insider
Ford's stock drops 6% in after-hours trading after releasing third-quarter earningsDavid Zalubowski
  • Ford's stock fell 6% in after-hours trading after lowering its profit forecast to $10 billion for 2024.
  • The guidance stems from high costs and low volumes of Ford Pro and Ford Blue models.
Advertisement

Ford fell 6% in after-hours trading after the company said it was expecting profits at the lower end of its full-year earnings guidance.

On Monday, the US automaker said it was expecting $10 billion in profit this year, a cut from its initial outlook of up to $12 billion. It said the guidance was hurt by costs and low volumes of its most profitable cars, Ford Pro and Ford Blue, due to supplier and hurricane-related disruptions.

"Clearly, our strategic advantages are not falling to the bottom line the way they should," Ford's CEO Jim Farley said in an earnings call on Monday. "Costs, especially warranty, has held back our earnings power."

The company posted third-quarter revenue of $46.2 billion, marking 5.5% year-on-year growth.

Farley also emphasized Ford's strategy to compete with Chinese EV makers. He said that finding new designs for components or using new suppliers will be key to reducing EV costs.

Advertisement

Companies like the Chinese brand BYD, Farley said, "have an incredible advantage on affordability of batteries."

"So, we have to make that up, or our opportunity is on the EV component side, inverters, gearboxes, motors," he continued.

Chinese EV makers have been on a roll this year. Despite concerns about tariffs from the US and European Union, sales for companies like BYD, Nio, and Zeekr were boosted by price cuts, the introduction of cheaper models, and Chinese EV demand from Russia. Their performance has raised eyebrows at Tesla, which was once dismissive of Chinese companies.

Ford's CEO is a big fan of Chinese EVs, too. In a podcast that aired last week, Farley said he doesn't want to give up the Xiaomi Speed Ultra 7 he's been driving for the past half year.

"We flew one from Shanghai to Chicago, and I've been driving it for six months now, and I don't want to give it up," Farley said about the car.

Advertisement

China sales and exports make up over $600 million of the company's profit this year, Farley said on Monday's call.

Ford's stock has fallen 6.7% this year.

Its competitors in the American auto scene have seen wider changes: General Motors has risen 47% this year. Jeep and Chrysler maker Stellantis has seen a 41% rout during the same time period. Tesla was down 42% year to date in April and May this year, but has since pared losses. It is up 5.7% year to date after reporting third-quarter earnings last week.

You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article