Ford Motor Co. F -3.59% reported a strong profit for 2021 and issued an upbeat forecast for this year, the latest sign that the auto industry could return to a degree of stability after two years of pandemic-related disruptions.
Still, the auto maker’s shares were down more than 4% after trading on Thursday, following fourth-quarter earnings that fell short of Wall Street forecasts. Ford Chief Financial Officer John Lawler said analysts likely expected higher output for the quarter, but the company was constrained by the computer-chip shortage and other challenges linked to the Covid-19 crisis.
For this year, Ford said it expects global vehicle deliveries to increase by a range of 10% to 15%. Additionally, it forecasts pretax profit to rise 15% to 25% to a range of $11.5 billion to $12.5 billion in 2022. The company cited its expectation for continued strong pricing, which it said should offset higher commodity prices, and a gradual easing of supply-chain problems.
The Dearborn, Mich., auto maker reported full-year net income of $17.9 billion, a result largely driven by $11 billion in special items booked in the fourth quarter. Those items, which included an $8.2 billion paper gain from its investment in startup Rivian Automotive and an increase in the value of its pensions, are excluded from the pretax, adjusted earnings tracked by Wall Street.
For the fourth quarter, Ford’s adjusted pretax profit rose 19% to $2 billion. That amounted to 26 cents a share, worse than the average analyst forecast of 45 cents, according to FactSet. Shares fell more than 4% in aftermarket trading.
The global auto industry has endured nearly two years of choppiness, much of it related to the supply-chain challenges that have snarled manufacturing lines and left dealerships short on vehicles.
The tight supplies on dealership lots—and related high prices—are likely to drag through much of this year, analysts and executives have said, because car makers have a backlog of customer orders to fill before replenishing dealer stocks.
Research firm IHS Markit, whose forecasts are used by auto suppliers to plan production schedules, expects a bounce back in vehicle output this year as supply-chain problems dissipate. The firm expects global production to increase about 9% from last year, to 76.4 million vehicles.
It projects output snapping back even faster in North America, with a forecast of 15.2 million vehicles produced in the region, which would be a nearly 17% increase from last year.
On Tuesday, General Motors Co. said it expects the company’s factory activity to rebound sharply this year, forecasting growth of 25% to 30% in global vehicle deliveries compared with 2021. GM expects output to improve gradually, reaching pre-pandemic levels by the third and fourth quarters, finance chief Paul Jacobson said.
“It doesn’t mean that things won’t pop up. But certainly, what we’re seeing in the very, very near term is giving us a little bit more confidence,” Mr. Jacobson said.
GM’s production forecast surprised some analysts, who viewed it as a sign that the chip crisis continues to abate. In a research note, Evercore ISI analyst Chris McNally said GM’s report “can only be viewed as a major positive” for car companies and parts suppliers.
Some analysts warned that GM and other auto makers that are trying to lift output after two years of constraints must get thousands of suppliers to buy into their bullish forecasts.
Computer-chip shortages and other supply-chain problems could prove stubborn, too, said Mark Fulthorpe, an analyst who heads IHS Markit’s global production forecasts. He cited chip-output disruption from recent flooding in Malaysia and Covid-19 restrictions in Japan.
Like rivals, Ford has benefited from surging new-vehicle prices and thin selection on dealership lots. Car companies have sharply cut discounts and other financial incentives that they normally offer to compete for buyers’ attention. That helped push up the average price paid by U.S. consumers to more than $40,000 last year, a record, according to research firm J.D. Power.
Ford’s stock was one of the top performers in the S&P 500 in 2021 amid investor enthusiasm for its electric-vehicle strategy, which includes the planned launch this spring of the F-150 Lightning, an electric version of its franchise pickup truck.
At the same time, the Michigan-based car company has been in recovery mode from the chip crisis for longer than GM and other competitors. It improved factory production improve in the third and fourth quarters of 2021, after it was among the hardest-hit global car companies in the first half of the year.
Write to Mike Colias at [email protected]
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