Ford down 4.7% in second quarter from 2023; warranty costs reported | The Arkansas Democrat-Gazette

DETROIT — Ford Motor Co.’s second-quarter net income fell 4.7% from a year earlier as the company’s internal combustion engine division reported a pretax loss due to higher warranty costs.

The Dearborn, Michigan-based automaker said Wednesday it earned $1.83 billion in revenue from April through June, up from $1.92 billion a year earlier.

Excluding one-time items, Ford’s earnings per share were 47 cents, according to FactSet, missing industry analysts’ estimates of 68 cents.

The automaker reported revenue of $47.8 billion for the quarter, up 6.3% from $44.95 billion in the second quarter of 2023. The result narrowly beat analyst estimates of $47.79 billion.

Ford has been stymied over warranty and recall costs over the past few years, but Chief Financial Officer John Lawler told reporters the company is making progress on quality. The second-quarter costs were attributed to older vehicles from the 2021 model year and earlier.

“We still have a lot of work ahead of us to improve quality and reduce cost and complexity, but the team is committed and we are heading in the right direction,” Lawler said in the earnings report.

The company said warranty costs in the second quarter were $2.3 billion, up $800 million from the first quarter and $700 million more than a year earlier.

Ford Blue, the company’s combustion engine unit, earned $1.17 billion before taxes in the quarter, down $1.1 billion from a year earlier. Ford Pro, its commercial vehicle unit, earned $2.56 billion, up $173 million from 2023. Model e, its electric vehicle unit, lost $1.14 billion, up $63 million from a year earlier.

Despite the decline in net income, Ford maintained its full-year pretax income forecast of $10 billion to $12 billion.

Ford’s sales in the U.S., its most profitable market, rose less than 1% in the second quarter to more than 532,000 vehicles.

“Ford is on the right track, our fundamental quality is improving and Ford Pro shows the huge potential we have across all of our businesses,” said President and CEO Jim Farley in the report. “Transparency and accountability through separate teams focused on the needs of different customers leads to better decisions and greater value for everyone.”

Ford said it plans to release third-quarter 2024 financial results after the market close on Monday, October 28.

Shares fell 16 cents, or 1.2%, to close Wednesday at $13.67. The stock, which had been up about 12% year to date, was down about 10% in after-hours trading Wednesday after the results were announced.