Ford Rebounds With Bold EBIT Forecast Post-UAW Strike, Showcasing Ford+ Plan's Strength
Portfolio Pulse from Nabaparna Bhattacharya
Ford Motor Company (NYSE:F) has updated its full-year guidance post-UAW strike, projecting an adjusted EBIT of $10.0 billion-$10.5 billion and adjusted free cash flow of $5.0 billion-$5.5 billion. The guidance includes $1.7 billion in lost profits due to the strike, which affected production and vehicle wholesales. The new U.S. labor agreement with the UAW is expected to cost $8.8 billion, with an anticipated cost effect of about $900 per vehicle by 2028. Ford aims to offset this through increased productivity and reduced expenses. The company had generated $4.9 billion in net income and $9.4 billion in adjusted EBIT before the strike's full impact. Ford's shares rose 1.32% to $10.73 in premarket trading.
November 30, 2023 | 1:48 pm
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Ford projects a robust adjusted EBIT of $10.0B-$10.5B and free cash flow of $5.0B-$5.5B for the year, despite strike-related losses and costs from the new UAW labor agreement.
The updated guidance from Ford reflects a strong financial outlook despite the recent UAW strike, indicating management's confidence in the Ford+ plan. The positive adjusted EBIT and free cash flow projections, along with the premarket stock price increase, suggest a favorable short-term impact on Ford's stock. However, the long-term effects of the new labor agreement costs will need to be managed carefully.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100