Ford (NYSE:F) shares were gaining traction in after-hours trading after a knee-jerk drop as costs associated with the Novelis fire – a key aluminum supplier – and lowered FY25 profit guidance, were overshadowed by a meaningful third-quarter beat.
“We are working intensively with Novelis and others to source aluminum that can be processed in the cold rolling section of the plant that remains operational while also working to restore overall plant production. We have made substantial progress in a short time to minimize the impact in 2025 and recover production in 2026,” Ford CEO Jim Farley said in a statement.
To help compensate for the shortage, Ford (NYSE:F) said it will increase production of the F-150 Super Duty truck by ~50,000 to meet increased demand for the vehicle.
For the third quarter, Ford (NYSE:F) earned a profit of $0.45 per share, down 4 cents from a year ago, but 9 cents better than expectations. Adjusted EBIT was unchanged at $2.6B with adjusted EBIT margin improving by 40 basis points to 5.1%.
Revenue for the quarter reached a record high of $50.5B, up 9% from a year ago and better than the consensus estimate of $43.86B.
Cash flow from operations in the third quarter was $7.4 billion and adjusted free cash flow was $4.3 billion. At quarter end, Ford had nearly $33 billion in cash and $54 billion in liquidity.
By segment, profitability at Ford Blue declined despite a 7% increase in revenue, driving EBIT margin down 70 basis points to 5.5%.
In the company’s electric division, revenue increased 52%, expanding the EBIT margin by 2,570 basis points to negative 79.1%.
Ford’s (NYSE:F) commercial segment realized an 11% increase in sales with EBIT margin down slightly at 11.4%.
Looking ahead to FY25, Ford (F) said the business is performing at the high end of its earlier guidance range while absorbing $1.0B in net tariff headwind. In addition to an EBIT headwind of $1.5B to $2.0B from the Novelis fire, adjusted free cash flow is expected to be impacted by about $2B to $3B.
Ford (F) now anticipates adjusted EBIT of $6B to $6.5B, down from initial guidance of $6.5B to $7.5B and below estimates of $6.89B. Adjusted free cash flow is now targeted for $2B to $3.5B to $4.5B, while capex was left unchanged at ~$9B, above the $8.78B estimate.
Shares are up more than 3%, reversing an initial 4% drop.