Ford stock dropped as much as 12% in Friday trading following a fourth-quarter earnings miss. Adjusted earnings per share came in at $0.26, below the $0.45 expected. The legacy automaker pointed to the global chip shortage and strained production lines. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Ford stock sank as much as 12% on Friday after fourth-quarter earnings fell short on consensus estimates as the global semiconductor shortage strained production lines.
Despite the disappointing quarterly results, the second-largest US automaker issued an optimistic forecast for the year ahead on expectations that the chip shortage will ease.
Here were the key numbers:
Adjusted earnings per share: $0.26, below analysts’ estimates of $0.45
Automotive revenue: $35.3 billion, below analysts’ estimates $35.5 billion
Ford stock was down 10.5% at $17.80 in midday trading Friday, the lowest level in three months. Shares peaked above $25 in January, lifting Ford’s market cap past $100 billion for the first time.
In 2021, Ford sold 1.9 million vehicles in the US, down by about 6.8% due to the global semiconductor shortage.
But for 2022, Ford sees global vehicle deliveries climbing 10%-15%, with adjusted earnings before interest and taxes growing 15%-25% to $11.5 billion-$12.5 billion.
Management also sees its pricing power remaining strong, allowing it to offset higher commodity prices.
But while more profits are expected to come in, Ford reportedly has plans to ramp up spending sharply on its electric-vehicle transformation.
According to a Bloomberg report, the automaker intends to spend an additional $10 billion-$20 billion over the next five to 10 years to reorganize its brand and hasten the shift to an electric future. That would come on top of the $30 billion Ford already plans to spend on EVs through 2025.
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