DETROIT — Ford Motor Co.’s net profit rose 19% in the second quarter as the company gathered enough computer chips to boost production and sales at the plant.
The Dearborn, Michigan automaker said Wednesday it earned $667 million from April to June, up from $561 million a year earlier.
The company stayed true to its full-year outlook of $11.5 billion to $12.5 billion in pretax profit and still expects 10 to 15 percent growth in vehicle sales to dealers for the full year. It also raised its dividend from 10 cents per share to 15 cents per share starting in the third quarter, the level it was before the pandemic.
But chief financial officer John Lawler said the automaker was modeling several scenarios in case the economy slips into recession. He says Ford is better prepared for a downturn than in the past thanks to lower spending and a stronger model lineup.
It’s also in the midst of a major corporate transformation that will include white-collar job cuts. CEO Jim Farley told analysts on Wednesday that the company was too complex and its costs were not competitive. It also has too many employees in some areas.
“We have skills that no longer work,” he said. “We have jobs that need to change.”
The company, he said, has too many versions of its internal combustion vehicles. It plans to build more models from the same electric vehicle foundations, spending capital on areas that affect customers such as software, digital displays and automated driving systems, Farley said.
Which areas will see cuts will be decided by workflow reviews, Farley said.
Ford has reorganized into three business units, one for electric vehicles, another for utility vehicles and another for internal combustion vehicles.
Lawler said the company’s factories are still hampered by the global shortage of computer chips, which he expects to improve in the fourth quarter.
“Given the constraints we have, the demand is always greater than what we can supply,” he said.
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Ford is also experiencing higher raw material costs and general inflation, which Lawler expects to ease in the second half.
The company predicts macroeconomic problems, with the next problem being energy shortages in Europe due to Russia’s throttling of natural gas supplies. Ford, he said, has 550 parts supply companies in high-risk areas of Europe, 130 of which ship parts to North America.
“I think we’re well prepared for the things we can predict, but it’s still a new day,” he said.
Ford shares jumped 6.3% in aftermarket trading after the earnings report.
From April to June, adjusted earnings per share were 68 cents, beating Wall Street estimates of 45 cents, according to FactSet. Revenue was $40.19 billion, also beating analyst estimates of $36.87 billion.
Sales in the United States, Ford’s most profitable market, rose just under 2% for the quarter. This boosted earnings when coupled with strong demand and high prices for trucks and SUVs.
Lawler said Ford’s selling prices rose about 6% last quarter from a year earlier and the company saw no decline in consumer demand. With average U.S. vehicle selling prices around $45,000, Lawler said there could be some price moderation in the second half of the year.