Ford Motor (F) CEO Jim Farley on Friday said the automakers’ erratic fourth quarter was the result of their transition to a new business structure that limited capacity combined with poor execution. But we remain disappointed with the results and need to see profitability pick up to keep the stock going beyond next quarter. Farley, in an interview with CNBC, said he is in the process of restructuring Ford to run the business more efficiently, but has struggled to simplify processes at the auto giant, which in turn held back his earnings last quarter. “A lot needs to change. We have many difficulties in relation to the client and within our company. It takes time to get over this,” Farley said. Ford said on Thursday that adjusted earnings per share (EPS) were well below analysts’ forecasts, eclipsing a revenue record. The company’s full-year EPS guidance was also weaker-than-expected, sending shares lower on Friday. Shares fell more than 8% in the afternoon at $13.12 a share. The lack of profit comes days after Ford said it was cutting prices on its Mustang Mach-E electric crossover while ramping up production, weeks after electric vehicle industry leader Tesla (TSLA) took a similar move. Price cuts mean that not all Mach-E models will be profitable on a per-unit basis. Ford announced last year that it would split its electric vehicles (EV) and combustion engine vehicles into separate business units, dubbed the Ford Model e and Ford Blue, respectively. But profitability has not yet caught up with the restructuring. On Friday, Farley said the automaker needs to cope with higher-than-expected costs, semiconductor chip shortages and supply chain issues to achieve greater profits in its electric vehicle division. “To get the desired margin of 8% requires a simplified effort,” he said. However, he added, management still needs to rethink how to manufacture and distribute electric vehicles in a more cost-effective way. Club view “It’s inexcusable that Ford had a bad quarter,” Jim Cramer said Friday. “We will upload shares if this quarter is not good,” he added. It’s good that Farley has recognized the need to improve supply chain efficiency, increase production, improve cost structures and improve execution, but we need to see results. We’re sticking with Ford for now, but he’s in the box, which means management has one more block to fix things. If we do not see improvement by the next quarterly report, we will have no choice but to move on. (The Jim Cramer Charitable Foundation has a long F. See the full list of stocks here.) As a CNBC Investing Club subscriber with Jim Cramer, you will receive a trade notice before Jim completes the trade. Jim waits 45 minutes after sending a trade alert before buying or selling shares in his charitable foundation’s portfolio. If Jim was talking about a stock on CNBC, he waits 72 hours after a trade alert is posted before making a trade. THE ABOVE INFORMATION ABOUT INVESTMENT CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATIONS OR OBLIGATIONS ARE OR ARISING IN CONNECTION WITH YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT IS GUARANTEED.
Ford CEO Jim Farley at the company’s plant in Dearborn, Michigan, where the electric F-150 Lightning is made, on April 26, 2022.
CNNBC | Michael Wayland
Ford Motor (F) CEO Jim Farley said on Friday that automakers’ tumultuous fourth quarter was the result of their transition to a new business structure that limited capacity coupled with poor execution. But we remain disappointed with the results and need to see an increase in profitability to keep the stock going beyond next quarter.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
