Ford shares sink after Q4 profits miss expectations, CEO says $2 billion on profits

Ford sinks after Q 4 profits misses expectations, CEO says $2 billion is left on the table.

The Ford F shares went down late Thursday after the automaker reported fourth quarter profits that missed expectations and CEO Jim Farley said the company should have done much better last year. Ford reported a quarter adjusted EBIT of $2.6 billion, missing Wall Street expectations for $3.45 billion. Adjusted profits did not meet expectations, coming in at $0.51 against analyst forecasts for $0.62. Ford shares fell by as much as 8% in after hours trade on Thursday.

The revenue figure represents a 17% jump compared to a year ago, when Ford was struggling with component and chip shortages.

Ford reported a full year adjusted EBIT earnings before interest and taxes of $10.4 billion, less than the previous guidance of $11.5 billion.

Ford CEO Jim Farley said the company should have done much better last year. We left $2 billion in profits on the table that were within our control, and we are going to correct that with improved execution and performance. Ford had a full-year EBIT forecast of $9 billion to $11 billion in the year 2023, and the consensus estimate was for around $10 billion. Last quarter, Ford CFO John Lawler noted that some customers were hesitant to use longer-term loan financing to ease monthly payments due to higher sticker prices. Lawler said Ford was seeing more customers passing on higher trim levels in order to purchase more affordable vehicles.

The street expected Ford to have a strong quarter following GM's monster Q 4 performance, where the automaker reported a huge profit beat and record revenue. GM also beat the top end of its full year 2022 EBIT forecast, and guided its full-year 2023 higher than analysts expected, seeing $11.5 billion in EBIT this year.

Investors will be watching for more color on demand issues for Ford due to slower macro conditions and higher interest rates. GM said earlier this week that it did not see a demand problem for its vehicles, and was bullish about its upcoming EV rollout in 2023.