Analyst Note
| David Whiston |We and Ford’s management were very frustrated with the firm’s fourth-quarter results, which had adjusted diluted EPS of $0.51, missing the Refinitiv consensus of $0.62, and sending the stock down 6.5% in Feb. 2 afterhours trading. Full-year adjusted total company EBIT of $10.4 billion was well below late October guidance of $11.5 billion. Fourth-quarter EBIT margin of 5.8% trailed GM by 300 basis points, which shows Ford still has lots to do in transforming what CEO Jim Farley calls the firm’s industrial system (product development, manufacturing, supply chain, and engineering). This change is happening slower than Farley would like and he said Ford left about $2 billion in profit on the table in 2022 for things that were within Ford’s control. Farley is right that these issues need to be corrected via improved execution, but we think he’d agree that talk is cheap and it’s time for Ford to show the market it can do better. Farley said 2023 is a year of execution and time to deliver, which we eagerly await.