: ‘Refounded’ Ford announces changes in financial reporting and reiterates margin targets 


Ford Motor Co. will now report its results by three new global business segments rather than by geographic region, the company announced Thursday.

The results will now be reported by Ford Blue, encompassing gas and hybrid vehicles, Ford Model e, or electric vehicles, and Ford Pro, which covers commercial products and services.

Ford F, +1.87% also reconfirmed its late-2026 margin targets of 10% for company adjusted earnings before interest and taxes (EBIT) and 8% for Ford Model e, with the latter “driven by ambitious scaling of EV production run rates,” according to the company. Additionally, the company reaffirmed its full-year 2023 adjusted EBIT guidance of $9 billion to $11 billion and its expectation that adjusted free cash flow will be about $6 billion.

The car giant also provided an update on its 2023 EBIT expectations. Ford expects about $7 billion for Ford Blue, which it described as “a modest improvement” over last year; a full-year loss of about $3 billion for Ford Model e; and EBIT approaching $6 billion for Ford Pro, nearly twice its 2022 earnings.

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Ford’s stock, which ended Wednesday’s session down 2.1%, rose 1.6% premarket Thursday.

“We’ve essentially ‘refounded’ Ford, with business segments that provide new degrees of strategic clarity, insight and accountability to the Ford+ plan for growth and value,” said Ford Chief Financial Officer John Lawler in a statement. “It’s not only about changing how we report financial results; we’re transforming how we think, make decisions and run the company, and allocate capital for highest returns.”

Last month Ford reported mixed fourth-quarter results and a $2 billion loss for 2022, which Chief Executive Jim Farley blamed on “deeply entrenched” operational shortcomings. In February the company’s stock received a downgrade from analysts at Tudor Pickering Holt, who said they are taking a “wait and see” approach toward the auto maker until investor events later in the year.

Ford will host a “teach-in” event at 10 a.m. Eastern time Thursday to walk investors and analysts through the changes announced this morning. The event is aimed at helping investors and analysts develop new models for projecting, tracking and valuing the individual and collective performances of Ford’s new segments, according to Lawler.

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Ford plans to announce first-quarter results on May 2 and will host its next capital markets day in Dearborn, Mich., on May 22. “On that day, executives will provide extensive updates on the strategic potential and progress of Ford+ and the company’s rapidly expanding capabilities in software and services, along with deep dives into plans and key performance indicators for each of the business segments,” Ford said in its statement.

The company’s stock has fallen 1.3% in 2023, compared with the S&P 500’s SPX, +1.14% gain of 2.5%.

Of 24 analysts surveyed by FactSet, nine have an overweigh or buy rating, 11 have a hold rating and four have an underweight or sell rating for Ford.

Additional reporting by Claudia Assis.

This article was originally published by Marketwatch.com. Read the original article here.

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