Ford CEO defends earnings after leaving $2 billion in profits 'on the table’
Yahoo Finance's Pras Subramanian discusses Ford CEO Jim Farley's comments on the automaker's fourth-quarter results, his frustration with the profits miss, and the company's EV transformation.
- Ford shares sliding 6% today after reporting disappointing Q4 earnings. CEO Jim Farley saying in a statement that the company left $2 billion in profits on the table. Senior autos reporter, Pras Subramanian, got the chance to speak with Farley and joins us now. Tough quarter for Ford, indeed.
PRAS SUBRAMANIAN: Yeah. Really rough quarter there. They had an EPS miss. You mentioned there Farley saying $2 billion left on the table there in profits. Net income down 90% from a year ago. Just not doing so hot. Said they're suffering still from that-- last year, they really had that rough chip crisis there with those trucks sitting on the lots unable to be delivered to dealers. So that was a big problem for them. But Farley says this transformation is still happening, will take some time. They need to bring those costs down pretty significantly, and I spoke to him today, earlier today at an event, and here's what they say about that.
JIM FARLEY: Be patient with Ford. We are under a double transformation. Some things are going really fast. Like, we're now number two in EV. The Lightning is sold out for like another year. On the other hand, the industrial system purchasing supply chain, our manufacturing, our engineering, we just have to get a lot of costs out. It funds the whole future of the business, and like fourth quarter is a good example. You lost 100,000 units because we just couldn't get chips. We can't let that happen.
So I think investors, we're going to be a great-- and we announced the $0.80 dividend too. So we're committed to giving cash back to the shareholders. But we're a growth company, and it's going to take a while on the industrial side. But boy, we're going to be a powerful company.
PRAS SUBRAMANIAN: So optimistic there for 2023. The EV sort of rolling out more growth there. And also good news from today with the IRS reclassifying the Model Y with the SUV designation, meaning it's the $80,000 price cap for the federal tax rate. So that's a big deal for them. So kind of take a little bit of those losses today off with that ruling, but still a rough day.