American carmaker Ford Motor Company posted a sharp 50% jump in revenue to $40.2bn in Q2 2022. The strong performance translated into higher earnings with adjusted EBIT tripling to $3.7bn, significantly higher vs. analyst expectations of $2.37bn, as margins improved to 9.3% vs. 3.9% a year ago on the back of improving supply chains. Net income rose too, albeit at a lower rate by 19% to $667mn after adjusting for a $2.4bn loss in value from its stake in EV maker Rivian Automotive. Further, Ford reported adjusted free cashflows of $3.6bn, ending the quarter with $29bn of cash and $45bn in total liquidity. Total debt ex-Ford Credit stood at $19.36bn, down 5% from end-2021. In light of the company’s comfortable liquidity position, the board announced a Q3 dividend of 15 cents per share that will be paid out on 1 September. CEO John Lawler reaffirmed Ford’s previous guidance for the full-year, which include an adjusted EBIT of $11.5-12.5bn and adjusted free cashflows of $5.5-6.5bn. He added that “we’re not currently cost competitive”, highlighting the company’s aims to reduce costs by $3bn in the short to medium term.
Following Ford’s strong performance, its 3.625% 2031s are trading 1.36 points higher at 83 cents to the dollar, yielding 6.13%.