Adrian Johnson
TLDR:
- Ford swung to a net loss in the fourth quarter due to a large accounting charge on pension plans and effects of a UAW strike.
- Ford reported a $523 million 4Q net loss, made 29 cents per share, and had revenues of $46 billion.
Ford Motor Co. reported a $523 million net loss in the fourth quarter due to a large accounting charge on pension plans and the effects of a six-week strike at multiple factories by the United Auto Workers union. This loss was compared to a $1.26 billion profit for the same period a year ago. The company made 29 cents per share, beating Wall Street estimates of 12 cents, and had revenue of $46 billion, up 4% from a year ago. Ford reported a $1.7 billion noncash accounting loss during the quarter on the remeasurement of pension and other post-retirement employee benefits.
Ford predicts pretax earnings this year in a range of $10 billion to $12 billion and announced a supplemental dividend of 18 cents per share on top of the normal 15 cents per share. The strike cost the company $1.7 billion in lost profits and cut sales to dealers by 100,000 vehicles, mostly happening in the fourth quarter. The strike caused Ford to lose production of high-profit trucks and SUVs, affecting its bottom line.
CEO Jim Farley mentioned a seismic change in EV demand during the last half of 2023, with price cuts of up to 20% worldwide widening company losses. Moving forward, Ford will focus sales of larger EVs on areas where it dominates, such as trucks and vans. It also plans to switch some capital spending to smaller EVs designed by a small independent team to reduce costs and ensure profitability within a year of hitting showrooms.
