DETROIT – Ford Motor Co.’s net profit increased 19% in the second quarter as the company raised enough computer chips to boost factory production and sales.
The Dearborn, Michigan-based automaker said Wednesday it earned $ 667 million from April to June, up from $ 561 million a year earlier.
The company has remained true to its full-year outlook for pre-tax profit of between $ 11.5 billion and $ 12.5 billion and still expects vehicle sales to dealerships to grow 10% to 15% for l whole year. It also increased its dividend from 10 cents per share to 15 cents per share, the level it was before the pandemic.
But CFO John Lawler said the automaker is modeling different scenarios in case the economy slides into a recession. He says Ford is better prepared for a recession than in the past thanks to lower spending and a stronger model range.
It is also in the midst of a major business transformation that will include white collar cuts, even if it won’t give any numbers. Ford will cut areas with old skills and add where new skills are needed for electric and connected vehicles, he said.
Lawler said the company’s factories are still slowed by the global shortage of computer chips.
“Given the constraints we have, the demand is still higher than we can supply,” he said.
From April to June, adjusted earnings per share was 68 cents, beating Wall Street’s estimates by 45 cents, according to FactSet.
Ford shares were up nearly 6% in the aftermarket after the earnings report.
Revenue was $ 40.19 billion, even beating analysts’ estimates of $ 36.87 billion.
Ford said in a statement that it plans to continue getting high prices for its vehicles for the rest of the year, which will help offset about $ 4 billion in additional costs from raw materials.
Sales in the United States, Ford’s most profitable market, increased by just under 2% in the quarter. This has increased profits when coupled with strong demand and high prices for trucks and SUVs.
Lawler said Ford’s sales prices rose about 6% in the last quarter from the previous year and the company is not seeing any drop in consumer demand. With average vehicle sales prices in the US around $ 45,000, Lawler said there may be some moderation in prices during the second half of the year.