The stock price rose by 9.5 % on Wednesday as Ford Motor raised its yearly profit forecast. The automaker, which is charging ahead with its investments in electric vehicles, declared that it would start paying dividends again.
As per Bloomberg news, the company lifted its 2021 profits for the second quarter in a row and is now projecting operating profit of $10.5 billion to $11.5 billion. The restored divided of 10 cents per share will be paid to the shareholders on December 1, as per the company.
After the march 2020 pandemic, Ford has suspended its dividend playout. The strong second quarterly results have been attributed to the easing of a supply shortage of semiconductors, which another automaker still faces. Strong demand for Ford vehicles added to the bottom line.
Considering the shortage of chip supplies, Ford, in comparison has amassed the largest inventory of its cars. Its average selling price was boosted by 13% to $51,460, according to research firm Edmunds.com.
CEO Jim Farley said, “We are committed to investing in the future and taking big swings as we move aggressively to lead a revolution in Electric vehicles“, he said on the company’s growth plan in a call with analysts.
According to Farley, Ford has an annual demand of 200,000 Mustang electric model Mach-E, and the company is quickly moving to complement its EV production in Mexico by producing Mach -E in China.
By 2025, Ford will have a manufacturing capacity of more than 1 million electric vehicles a year with as per Farley.
Ford is hoping for the easing of chip supply shortage. However, John Lawyer, Chief Financial Officer, told reporters that the supply crunch can extend till 2023, and Ford Factories are not expected to run at full capacity until 2022.
Lawyer says, “We are expecting a 10% sales growth in the fiscal year 2021 while the chip constraint will continue to impact us”.
The earning per share in the third quarter came to 51 cents which excluded certain items surpassing the Analyst’s estimates of 27 cents.
The revenue came to $35.7 billion compared to the forecast of $31.6 billion. According to Dan Lawyer, a Credit Suisse analyst, the results have outperformed analysts’ estimates for six consecutive quarters.
