Ford reports quarterly loss but says sales grew

Ford reports quarterly loss but says sales grew

Ford Motor Co. said it lost $526 million in the last three months of 2023, mainly due to special charges related to its employee pension programs and the reorganization of some of its overseas operations.

The automaker said its fourth-quarter revenue rose to $46 billion, from $44 billion a year earlier, thanks to strong sales of internal combustion vehicles and light commercial trucks.

The company’s division that makes gasoline and hybrid vehicles generated $813 million before interest and taxes in the fourth quarter, and its commercial vehicle division generated $1.8 billion. The unit that makes electric cars lost $1.6 billion.

John Lawler, Ford’s chief financial officer, said the company’s fourth-quarter profits were also hurt by an extended strike by the United Auto Workers union and higher labor costs caused by the new contract it signed with the UAW.

“Adjust for those two factors, and you’ll see a very strong quarter,” Lawler said on a conference call.

Ford had previously said that the strike reduced its pre-tax profits by $1.7 billion in 2023.

Looking ahead, Ford said it expects to achieve adjusted earnings of $10 billion to $12 billion before taxes and interest this year.

Speaking to financial analysts, Ford CEO Jim Farley said the company is adjusting its investments in electric vehicles, focusing less on larger cars and more on smaller models that will use the lower-cost design that Ford is working on.

A small electric car from Ford will likely compete with an affordable vehicle that Tesla is expected to introduce in 2025. “The ultimate competition will be affordable Tesla and Chinese manufacturers,” Farley said.

Ford reported profits of $4.3 billion in 2023, compared to a loss of $2 billion in 2022. Revenue in 2023 rose to $176 billion, up from $158 billion in 2022. The company said its 58,000 workers in The UAW will receive profit-sharing bonuses of up to $10,400 based on its performance in 2023.

The automaker said it wants to improve its financial performance by reducing investment in some areas, such as electric cars, while setting higher profit targets for projects in which it is still investing money. “For projects that have credible plans to achieve their targeted returns,” Mr. Lawler said in a statement.

Ford shares rose about 6 percent in extended trading after it announced profits.

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