Ford Motor Co.’s stock dropped more than 5% after hours Thursday after the carmaker reported lower-than-expected quarterly earnings and withdrew its guidance for the year, citing the pending agreement with the United Auto Workers.
also reported an adjusted loss of $1.3 billion for its EV unit, saying that customers interested in EVs are “unwilling” to pay the vehicles’ premium prices.
Still, Chief Executive Jim Farley praised Ford’s recent reorganizing efforts, saying that they started to bear fruit in the quarter.
“We’re building a more dynamic, highly talented and customer-focused company at the intersection of great vehicles, iconic brands, innovative software and high-value services,” Farley said in a statement accompanying results.
Ford earned $1.2 billion, or 30 cents a share, in the third quarter, swinging from a loss of $827 million, or 21 cents a share, in the year-ago period.
Adjusted for one-time items, Ford earned 39 cents a share. Adjustments included a $2.7 billion impairment charge related to the investment in the shuttered, Ford-backed Argo AI driverless-car company.
Revenue rose 11% to $43.8 billion, the carmaker said.
Analysts polled by FactSet expected Ford to report adjusted earnings of 46 cents a share on sales of $43.94 billion.
Ford also reported that its EV business recorded an EBIT loss of $1.3 billion, thanks to “continued investment in next-generation EVs and challenging market dynamics.”
Many customers in North America interested in EVs are “unwilling to pay premiums for them,” which “sharply” flattens EV prices and profit, Ford said.
The carmaker said it was “poised to deliver profitability” within its previous EBIT guidance range of $11 billion to $12 billion before it decided to withdraw the year’s guidance pending the agreement with its workers.
The results come as striking employees at Ford are returning to work after the carmaker and the United Auto Workers reached a tentative agreement, which was announced late Wednesday.
Ford, GM and Stellantis each have had several factories and distribution centers offline due to the strike. GM and Stellantis are expected to follow with agreements of their own.
Ford was the first company to face walkouts at a key factory, as workers at Ford’s Kentucky pickup-truck plant walked out on Oct. 11.
GM earlier this week detailed some of the impacts of the strike, particularly through the end of the current quarter.
See also: UAW strike moves to GM’s key SUV plant
Ford shares have underperformed the broader equity market, and are losing about 1.6% so far this year, which contrasts with gains of around 8% for the S&P 500 index
The underperformance holds for the past three months, with Ford shares down 16% compared with the index’s 8% drop in the period.
The union said that the current four-year deal grants a 25% increase in base wages through April 2028. It will cumulatively raise the top wage at Ford by more than 30% to more than $40 an hour, and starting wages by 68% to over $28 an hour.