Ford Motor's second-quarter profit plummeted by 26%, far below expectations, with no upward revision in annual guidance, falling more than 10% after hours | Financial Report Insights

Ford Motor, the long-established American automotive giant, saw a sharper-than-expected decline in profit in the second quarter, reflecting a serious drag on the company's profitability as warranty costs soared amid a slowdown in the automotive market.

On Wednesday, July 24th, Eastern Time, Ford Motor released its financial data for the second quarter of this year.

1) Key Financial Data

Revenue: In the second quarter, revenue was $47.8 billion, up 6.2% year-on-year, compared to analysts' expectations of a 3.6% decline to $43.37 billion.

EBIT: Adjusted Earnings Before Interest and Taxes (EBIT) for the second quarter was $2.8 billion, down 26.3% year-on-year, compared to analysts' expected 1.8% year-on-year decrease to $3.73 billion.

EPS: Adjusted Earnings Per Share (EPS) for the second quarter was $0.47, down 34.7% year-on-year, compared to analysts' expected 6.9% year-on-year decrease to $0.67.

FCF: Adjusted Free Cash Flow (FCF) for the second quarter was $3.2 billion, up 10.3% year-on-year.

2) Segment Revenue

Traditional Fuel Vehicle Business Ford Blue: Ford Blue's revenue in the second quarter was $26.7 billion, compared to analysts' expected $25.63 billion; EBIT for the quarter was $1.171 billion, compared to analysts' expected $2.43 billion, a loss of $1.137 billion a year ago; profit margin in the second quarter was 4.3%, down 5.6 percentage points year-on-year.

Electric Vehicle Business Ford Model e: Ford Model e's revenue in the second quarter was $1.1 billion, compared to analysts' expected $1.31 billion; EBIT for the quarter was a loss of $1.143 billion, compared to analysts' expected loss of $1.38 billion, a loss of $63 million a year ago; profit margin in the second quarter was -194.8%.

Commercial Vehicle Business Ford Pro: Ford Pro's revenue in the second quarter was $17 billion, compared to analysts' expected $16.48 billion; EBIT for the quarter was $2.564 billion, compared to $173 million a year ago; profit margin in the second quarter was 15.9%, up 2.9 percentage points year-on-year.

3) Performance Outlook

Full-Year Adjusted EBIT Outlook remains unchanged at $10-12 billion, with analysts expecting $11.23 billion.

Full-Year EBIT Outlook for Ford Blue is $6-6.5 billion, previously estimated at $7-7.5 billion.

Full-Year EBIT Outlook for Ford Pro is $9-10 billion, previously estimated at $8-9 billion.

Full-Year EBIT Outlook for Ford Model E remains a loss of $5-5.5 billion

Annual Capital Expenditure Expectations remain unchanged at USD 8-9 billion, with analysts expecting USD 83.9 billion.

Annual FCF Expectations are USD 7.5-8.5 billion, raised by USD 1 billion.

After the financial report was released, Ford Motor's stock price fell nearly 1.2% in after-hours trading, with the decline expanding to over 10%.

The financial report shows that Ford Motor's overall revenue in the second quarter exceeded expectations, increasing instead of decreasing. This was due to the significant growth in the traditional automotive business Ford Blue, while the electric vehicle business continued to operate at a loss. The business unit Ford Pro, which includes commercial vehicles, became a highlight with profits more than double that of the traditional fuel vehicle business.

Ford's electric vehicle business, Ford Model e, has incurred losses exceeding USD 1 billion in each of the two quarters this year. Ford had previously projected an annual loss of USD 5-5.5 billion for this business this year.

Looking ahead, Ford has lowered the EBIT profit guidance for Ford Blue by USD 1 billion and raised the EBIT guidance for Ford Pro by USD 1 billion. At the same time, Ford's full-year EBIT guidance for this year remains unchanged. Some analysts have commented that while some investors were expecting Ford to raise its full-year profit guidance, maintaining the guidance unchanged indicates that Ford's full-year guidance has not improved further, disappointing investors