Ford The car company overcame a critical parts shortage and realized a windfall profit in the second quarter, thanks to soaring prices for increasingly difficult to find models Dealer a lot of.

The automaker also raised its adjusted full-year profit forecast on Wednesday to US$9 billion to US$10 billion in earnings before interest and taxes. This is an increase of about 3.5 billion US dollars from the previous forecast, at least three times the amount last year. The Dearborn, Michigan-based company expects sales to increase by about 30% in the second half of this year.

CEO Jim Farley said that Ford now has more than $120,000 in electric car reservations for $100. F-150 Lightning pickup is coming next spring, and the demand for recovery is also high Mustang Sports utility vehicle.

Farley told analysts on the conference call: “Due to those hot products, pent-up demand and improved chip supply, we are now ready for growth in the second half of the year and beyond.”

Ford suffered more losses than competitors in semiconductor shortages because it purchased so many chips from a Japanese factory that had a fire in the spring. Despite this, the company reported an EBIT of US$1.1 billion for the second quarter, far higher than analysts’ forecast of US$167 million. Adjusted earnings per share were 13 cents, exceeding analysts’ forecast loss of 5 cents.

After the results were announced, the automaker’s stock price rose 4% to $14.42 in after-hours trading. As of Wednesday’s close, investors have supported the automaker, and its share price has risen 58% this year.

New mode Blitz

Well-received new models, such as F-150 Lightning, compact Maverick Trucks and Mustang SUVs, as well as a $30 billion plan to electrify the entire product line, have boosted Ford’s stock price.

Although sales are expected to increase in the second half of the year, Ford predicts that its EBIT will decline from the first six months of this year.

Chief Financial Officer John Lawler said that rising commodity costs will require2 100 million U.S. dollars in the second half of the year’s earnings fell.The profit of Ford Credit, the automaker’s lending arm, will also drop by about $11 100 million, because the sky-high used car prices have fallen. At the same time, Ford will invest heavily in electrification and automation.

The scarcity of chips caused long-term factory shutdowns and reduced dealer batch inventory by more than half. But according to researcher Cox Motors, the lack of supply caused the average price of Ford’s new models to reach a record high of $47,446.

Farley said last month that even after the chip crisis subsides sometime next year, in order to keep prices high, low inventory of dealer batches will become the “new normal.” He told analysts on Wednesday that Ford is moving to an order-banking system instead of flooding dealer batches with multiple versions of each model.

He said that the automaker’s orders at the end of the second quarter were seven times those of a year ago. The steering order will help Ford control its incentives to spend thousands of dollars per vehicle to move metal away from dealers.

“I know we were wasting money on incentives, I just don’t know where,” Farley said. “With an order-based system, our risk will be much smaller.”

Decline in market share

U.S. car sales increased by 9% this quarter, but due to inventory depletion, June fell sharply. Cox said that Ford’s earnings for the quarter were far below the 50% increase in the United States as a whole, which caused the automaker’s domestic market share to fall from 14.7% a year ago to a six-year low of 10.7%. .

Revenue in the second quarter increased by 38% to US$26.8 billion, exceeding analysts’ expectations of US$23 billion, driven by strong sales in the domestic market.

Due to the high resale price of used cars, Ford Credit’s pre-tax income was $1.6 billion. This is the largest contributor to the profit in the second quarter.

The North American business boosted Ford’s profitability, with pre-interest and tax income of US$194 million. In comparison, a year ago, when the pandemic hit and the factory closed for two months, it lost $974 million.

The automaker continues to lose money in most other major regional markets, including Europe China And South America.

In Europe, Ford reported a loss of US$284 million, an improvement from a loss of US$664 million in the same period last year. Sales in 20 major European markets increased 44% year-on-year, but dropped significantly compared to 2019.

Ford has also seen more red ink in China, the world’s largest auto market. It reported a loss of US$123 million, slightly better than the loss of US$136 million a year ago. In the quarter, sales in the Chinese market increased by 24%, and deliveries more than doubled. Lincoln Luxury line.Ford’s Lincoln sales in China this quarter are almost twice as high as in the U.S.

In South America, after Ford stopped production in Brazil for more than 100 years, the company lost $186 Million US dollars, compared with a loss of 165 million US dollars in the same period last year.

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