Ford revealed its Q1 2022 earnings this week, and it confirmed a web lack of $3.1 billion. The corporate factors to its funding in Rivian inventory as the explanation for the loss. Rivian’s shares plummeted, which precipitated an enormous hit on Ford’s profitability. Nevertheless, the automaker continues to stay to its full-year steering, even amid manufacturing constraints.
Ford additionally famous that whereas the worldwide chip scarcity restricted automobile manufacturing in January and February of 2022, March noticed an uptick in manufacturing. The corporate’s wholesale shipments had been down 9 p.c on the quarter, to round 970,000 autos.
Automotive Information stories that Ford was truly a worthwhile firm previous to investing in Rivian. That mentioned, the corporate’s adjusted earnings dropped 41 p.c yr over yr to $2.3 billion, excluding taxes and curiosity. In North America, Ford made $1.59 billion in Q1 2022. Throughout the identical quarter in 2021, it earned $2.9 billion. Its efficiency additionally suffered yr over yr in all different international markets, except for South America.
All in all, Ford misplaced $5.1 billion over the course of Q1 2022 on its Rivian inventory alone. Firstly of the yr, Rivian’s shares had been at round $102. Nevertheless, they dropped to ~$50 by March 31, 2022. At present, the shares opened at simply $31.59.
Ford mentioned that the primary quarter of 2022 does not precisely depict the potential of its enterprise mannequin. It added that the automaker’s functionality is way stronger than what this quarter was capable of show.
Wanting ahead, Ford will proceed with its 2022 steering of $11.5 to $12.5 billion in “adjusted EBIT.” If the corporate achieves its targets, it might see a 15 to 25 p.c enhance over 2021. The automaker additionally estimates that automobile manufacturing will develop in 2022 to achieve ranges which are 10 to fifteen p.c larger than these of 2021.
Ford CFO John Lawler pointed to some 400,000 autos already ordered by the top of March 2022. He additionally shared that robust pricing has already helped to curb the affect of inflation.
Tell us your ideas associated to this story. Was it a nasty alternative for Ford to put money into Rivian? Will the funding finally repay?