American carmaker Ford Motor Company reported a solid Q1 with revenues increasing to $36.2bn, up 6% YoY leading to a net income of $3.3bn, its best since 2011 and record adjusted EBIT of $4.8bn. Ford said that automotive EBIT outside North America turned positive at $454mn, $980mn better than the same quarter last year. In terms of guidance, Ford expects adjusted EBIT to be at $5.5-$6.5bn, including a ~$2.5bn adverse effect from semiconductor shortage. CFO John Lawler said that they expect to lose about 1.1mn units of production in 2021 due to the shortage of semiconductors. Ford added that they were taking steps to make battery cells for EVs, following the path of Tesla and GM, with plans to invest $185mn into a new battery lab. Cash flows from operations were at $4.5bn; however free cash flows were at negative $400mn. The carmaker stated that its balance sheet remains strong with cash exceeding $31bn and total liquidity above $47bn. Ford became a fallen angel in March last year as the pandemic hit, with its rating cut by S&P to BB+ from BBB-, moving from investment grade to junk territory. Fitch too cut it to junk status in May last year to BB+ from BBB-.

Ford’s bonds were trading stable with its 4.75% 2043s at 101.6, yielding 4.6%.

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