Categories Analysis, Industrials

Ford (F) vs. General Motors (GM): A look at how these automobile giants fared in the third quarter

For the full year of 2021, GM expects net income of $8.1-9.6 billion

Leading automakers Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) reported their earnings results for the third quarter of 2021 on the same day. The revenue and profits of both companies witnessed declines on a year-over-year basis but managed to beat Street expectations. Here’s a look at how the automobile giants fared during the quarter:

Quarterly numbers

Ford delivered total revenue of $35.6 billion in Q3, which was down 5% from the same period a year ago. The company’s adjusted EPS fell 22% to $0.51. General Motors’ revenue fell 25% year-over-year to $26.8 billion while its adjusted EPS dropped 46% to $1.52.

Ford’s total automotive revenue declined 4% YoY to $33.2 billion. Although semiconductor availability is still a challenge, it improved versus Q2, which in turn led to sequential increases of 32% and 33% respectively in wholesale shipments and revenue.

GM’s automotive revenue dropped 28% YoY to $23.4 billion in Q3. The company delivered 446,997 vehicles in the US during the quarter, which was down 32.8% YoY, and 623,000 vehicles in China. Sales in both regions were impacted by semiconductor supply chain disruptions.

The highlight of Ford’s quarterly report was the reinstatement of its dividend. The company said it would restart a regular quarterly dividend of $0.10 per share in the fourth quarter of 2021.

Electric and autonomous vehicle plans

Ford plans to invest over $30 billion in battery electric vehicles during 2020 to 2025. The company’s investments in its battery plants in Kentucky and Tennessee are anticipated to help increase its annual battery capacity in the US to more than 1 million units. Ford has also invested $1 billion in its Electrified Center in Germany which is expected to be all-electric by 2023.

Ford is seeing strong demand for its all-electric Mustang Mach-E worldwide and the company is working on breaking production constraints and increasing availability to meet this demand. The company believes the global demand for Mustang Mach-E could approach 200,000 vehicles a year.

Ford is scaling the number of vehicles capable of over-the-air software updates. The company expects to move this from about 1 million to more than 33 million by 2028.  

General Motors expects revenue from EVs to grow from about $10 billion in 2023 to $90 billion by the end of the decade. The company expects its North American EV assembly capacity to reach 20% by 2025 and rise to 50% by 2030. GM also expects to generate more than $80 billion in new incremental revenue from connected vehicles and other new businesses by the end of the decade.

Outlook

For the full year of 2021, GM expects net income of $8.1-9.6 billion. GAAP EPS is expected to be $5.52-6.52 while adjusted EPS is expected to be $5.70-6.70. Ford raised its guidance for FY2021 adjusted EBIT to between $10.5-11.5 billion. The company expects adjusted free cash flow for the year to be $4-5 billion.

Shares of Ford have gained 92% thus far this year while GM’s shares have climbed 31%.

Click here to access the full transcripts of Ford and General Motors‘ Q3 2021 earnings conference calls

Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!

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