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February 3, 2022 5:15 PM, EST

Ford Profit Falls Short of Estimates Despite Rising Car Prices

Ford Profit Falls Short of Estimates Despite Rising Car PricesThe all-electric Ford F-150 Lightning truck during an augmented reality presentation at the Motor Bella Auto Show in Pontiac, Mich. (Emily Elconin/Bloomberg)

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Ford Motor Co. reported fourth-quarter earnings that missed analysts’ estimates despite a surge in prices for its vehicles, and warned of higher commodity costs in the year ahead.

The automaker on Feb. 3 posted earnings of 26 cents a share excluding some items, less than the 45 cents analysts predicted on average. Adjusted earnings before interest and taxes of $2 billion were less than the $2.77 billion analysts expected.

For 2022, Ford forecasts earnings of $11.5 billion to $12.5 billion before interest and taxes, up 15% to 25% over 2021.

Investors have cheered CEO Jim Farley’s effort to accelerate Ford’s switch to electric vehicles, sending the shares up 136% last year and making the company the top automotive gainer. Ford’s market briefly topped $100 billion.

In recent weeks, that valuation has fallen back to around $81 billion. The stock fell as much as 7.9% to $18.32 in extended trading. It’s down 4.2% this year through close on Feb. 3.

“Financial performance is obviously critical,” Farley said in a statement. “We’re also proud that customers see how Ford is taking EVs mainstream.”

Bloomberg News reported Feb. 1 that Ford is considering adding up to $20 billion to its EV spending over the next decade to convert factories to battery-powered models. Farley has already tripled output of its electric Mustang Mach-E in Mexico and doubled production of the F-150 Lightning going on sale this spring.

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“Ford has been really aggressive going electric in some very iconic vehicles, which is a bold move the market appreciates,” David Whiston, an analyst with Morningstar Inc. in Chicago, said before the earnings were released. “Rather than putting out some ugly econobox that only gets 100 miles on a charge, they came out with a great-looking Mustang Mach-E and now this year the F-150 Lightning, its most important vehicle.”

Automotive revenue in the fourth quarter totaled $35.3 billion, surpassing the $34.6 billion analysts expected.

Dearborn, Mich.-based Ford has seen car buyers pay up for its models as the pandemic and a shortage of semiconductors slashed inventory on dealer lots, causing discounts to dry up. Average sale prices for Ford models in the U.S. reached almost $51,000 in the fourth quarter, up from $46,211 a year earlier, according to automotive researcher Edmunds.com.

Crosstown rival GM earlier this week reported fourth-quarter earnings that beat analysts’ estimates but its forecast for the year was little changed from 2021.

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