Ford’s upbeat Q3 results overshadowed by EV losses, lowered guidance

Shares of Ford (NYSE:F) are losing traction in after-hours trading as continued softness in the company’s electric vehicle division and disappointing guidance overshadowed better-than-expected Q3 results, weighing on shares.

Although the company realized a lower loss per EV ($38,350) the company’s EV division, Ford Model e, reported a wider EBIT loss of $1.2B on a 33% drop in revenue from the same quarter last year. This compares to a 13% increase in revenue for the company’s commercial division (Ford Pro), and 3% increase in the ICE division (Ford Blue).

The company’s CEO, John Lawler, also warned that warranty and inflationary costs continue to impact profitability. While warranty costs are beginning to ease, the progress has not yet flowed through to the bottom line “in a meaningful way,” Lawler said on CNBC. Although he didn’t specify warranty cost for the current reported quarter, year-over-year showed a “slight improvement.”

For the current quarter, Ford earned a profit of $0.49 per share on a 4.6% gain in revenue to $43.07B, beating expectations by 2 cents and $1.12B, respectively.

For the full year, Ford (F) lowered its EBIT estimate to $10B from earlier guidance of $10B to $12B.

Profitability for Ford Pro is now expected to be between $9B from earlier guidance of $9B to $10B, while Ford Blue is expected to report total revenue of about $5B versus $6.0B to $6.5B in previous guidance. Model e is expected to record a loss of about $5B versus earlier guidance for a loss of $5.0B to $5.5B.

“I have reason to believe that continued adoption of Ford Pro will be Ford’s magic bullet for improved revenue growth and margins during a challenging consumer period,” Seeking Alpha analyst Michael Del Monte said in reaction to the automaker’s latest results. .

Ford (F) shares are down nearly 5%.