DETROIT — The worldwide pc chip shortage minimize into third-quarter income at each Ford and crosstown rival General Motors, with each firms having to quickly shut factories, pinching provides on dealer heaps.
Ford’s web earnings of $1.83 billion fell 23% from a yr in the past, whereas GM’s revenue dropped 40% to $2.4 billion. Excessive costs, primarily for the pickup trucks and large SUVs that the automakers bought, eased the sting from decrease gross sales.
Ford, which reported outcomes after Wednesday’s closing bell, mentioned it might resume paying a dividend, 10 cents per share, beginning within the fourth quarter. It is going to value the corporate about $400 million per quarter. Ford’s stock jumped 7.5% in after-market buying and selling.
The corporate mentioned its income dropped 5% from a yr in the past to $35.68 billion. That fell wanting Wall Road estimates of $38.2 billion.
Excluding one-time objects, the Dearborn, Michigan, firm made 51 cents per share, beating the 27 cents anticipated by analysts polled by FactSet.
Ford’s gross sales fell 27% from July via September within the U.S., its most profitable market. The corporate additionally misplaced 2.4 proportion factors of U.S. market share, largely as a result of like GM, it could not produce sufficient autos to fulfill demand.
However the common Ford new vehicle bought for greater than $51,000 in the course of the quarter, up nearly 13% from a yr in the past, in response to Edmunds.com.
Chief Monetary Officer John Lawler mentioned Ford has the money and earnings to spend money on electric vehicles and providers. He mentioned the corporate is assured within the trajectory of its enterprise.
“That is offering us the monetary flexibility to totally fund our plan and all of our different capital wants,” he mentioned. “We are also centered on complete shareholder returns, not solely appreciating inventory worth but in addition the dividends.”
Lawler mentioned there may be sturdy demand for Ford’s merchandise that the corporate cannot meet due to the chip scarcity. Globally, he mentioned he thinks the corporate might promote 200,000 Mustang Mach-E electrical SUVs per yr.
He mentioned the chip scarcity ought to ease a bit from October via December, and gross sales to sellers ought to rise 10% this quarter over the earlier one. Whereas provides will enhance, the scarcity will proceed into subsequent yr and probably into 2023, he mentioned.
Ford raised its full-year pretax earnings outlook to between $10.5 billion and $11.5 billion, and mentioned it plans to make capital investments of $40 billion to $45 billion from 2020 to 2025. That features about $15 billion that may go towards battery-electric autos in the course of the interval.
Lawler cautioned, nonetheless, that the corporate faces greater prices in supplies and freight. Commodity prices equivalent to metal are anticipated to rise $3 billion to $3.5 billion this yr, and one other $1.5 billion subsequent yr, he mentioned.
GM
GM’s earnings fell from $4 billion final yr as gross sales slumped and the corporate misplaced market share within the U.S., its most worthwhile nation. Income for the quarter plunged 25% to $26.78 billion.
GM CEO Mary Barra, in the meantime, mentioned on a convention name with analysts that she is “fairly assured” that GM’s San Francisco-based Cruise autonomous vehicle subsidiary can be carrying passengers with out human security drivers someday subsequent yr. To try this, Cruise nonetheless wants a last allow from California regulators.
Barra additionally instructed reporters Wednesday that the worldwide scarcity of semiconductors, plus COVID outbreaks at provider factories, hit the corporate in the course of the third quarter. “It nonetheless continues to be considerably unstable,” she mentioned.
Nonetheless, GM is seeing enchancment within the present quarter and expects extra provides within the first three months of 2022.
GM has mentioned it expects to supply about 200,000 fewer autos within the second half of this yr in contrast with the primary half, with a lot of the influence occurring from July via September.
Barra mentioned she’s spoken with the CEOs of most main chip makers, and the businesses are engaged on methods to verify the shortages do not occur once more. “I believe we’ll positively see modifications to make sure we have now the correct provide,” she mentioned.
GM’s revenue got here although U.S. third-quarter gross sales had been nearly 33% decrease than a yr in the past. The corporate misplaced 3.8 proportion factors of U.S. market share, Edmunds mentioned.
However Barra mentioned she expects GM’s market share to bounce again when factories get again to regular manufacturing. “We’re promoting every part we will. I want we had extra autos,” she mentioned.
Shopper willingness to pay excessive costs for scarce new autos stored the cash flowing for GM. The typical sale worth paid for a GM automobile topped $50,000 for the quarter, up greater than 16% from a yr in the past, Edmunds mentioned. Barra mentioned that after provides develop, she expects the excessive costs to ease.
With the anticipated enchancment in chip provides, GM elevated its full-year web earnings steerage to a spread of $8.1 billion to $9.6 billion. Within the second quarter it had forecast $7.7 billion to $9.2 billion for the yr.
Shares of GM closed Wednesday down 5.4% at $54.26.
