DETROIT — The worldwide pc chip scarcity lower into third-quarter income at each Ford and crosstown rival Normal Motors, with each firms having to briefly shut factories, pinching provides on vendor heaps.
Ford’s internet revenue 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 vans and massive SUVs that the automakers offered, 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 would value the corporate about $400 million per quarter. Ford’s inventory 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 in need of Wall Road estimates of $38.2 billion.
Excluding one-time gadgets, 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 by September within the U.S., its most profitable market. The corporate additionally misplaced 2.4 share factors of U.S. market share, largely as a result of like GM, it could not produce sufficient autos to satisfy demand.
However the common Ford new automobile offered for greater than $51,000 throughout the quarter, up virtually 13% from a yr in the past, in line with Edmunds.com.
Chief Monetary Officer John Lawler mentioned Ford has the money and revenue to put money into electrical autos 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 targeted on whole shareholder returns, not solely appreciating inventory worth but in addition the dividends.”
Lawler mentioned there may be robust demand for Ford’s merchandise that the corporate cannot meet due to the chip scarcity. Globally, he mentioned he thinks the corporate may promote 200,000 Mustang Mach-E electrical SUVs per yr.
He mentioned the chip scarcity ought to ease a bit from October by 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 can go towards battery-electric autos throughout the interval.
Lawler cautioned, nonetheless, that the corporate faces larger prices in supplies and freight. Commodity prices similar 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’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 automobile subsidiary could 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 informed reporters Wednesday that the worldwide scarcity of semiconductors, plus COVID outbreaks at provider factories, hit the corporate throughout the third quarter. “It nonetheless continues to be considerably unstable,” she mentioned.
Nevertheless, 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 many of the affect occurring from July by 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 undoubtedly see adjustments to make sure now we have the appropriate provide,” she mentioned.
GM’s revenue got here regardless that U.S. third-quarter gross sales had been virtually 33% decrease than a yr in the past. The corporate misplaced 3.8 share 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 all the things we will. I want we had extra autos,” she mentioned.
Client willingness to pay excessive costs for scarce new autos saved the cash flowing for GM. The common 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 when provides develop, she expects the excessive costs to ease.
With the anticipated enchancment in chip provides, GM elevated its full-year internet revenue steerage to a variety 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.