DETROIT – Ford Motor on Thursday said its adjusted pretax earnings for the second quarter will “surpass its expectations” and be significantly better than a year ago, while net income will be “substantially lower” than the same period last year.
The company released the broad guidance ahead of a presentation by Ford CEO Jim Farley at Deutsche Bank’s global automotive industry conference Thursday afternoon.
“The improvement in automotive is being driven by lower-than-anticipated costs and favorable market factors,” the company said in a press release. “Additionally, higher vehicle auction values are benefitting Ford Credit.”
The first half of the year has been better than many expected for automakers such as Ford. Supply constraints due to parts problem have led to higher vehicle prices and profits.
Ford’s comments come a day after General Motors said it expects adjusted pretax earnings of $8.5 billion to $9.5 billion during the first half of the year, up from an estimated $5.5 billion.
In April, Ford forecasted its full-year adjusted pretax profit to be between $5.5 billion and $6.5 billion, including an adverse effect of about $2.5 billion from the semiconductor issue. Adjusted free cash flow for the full year was projected to be $500 million to $1.5 billion.
Ford said net income for the second quarter is expected to be substantially lower than a year ago, when results included a $3.5 billion gain in an investment in its self-driving Argo AI unit with Volkswagen. The company reported a net profit of $1.1 billion during the second quarter of last year.