Things are looking up for Dearborn's favorite son.
Despite the dire condition of the global economy, Ford has managed to claw back a profit in the third quarter of 2020. According to new financial reports, the Dearborn, Michigan-based company has reported a net profit of $2.4 billion, and a 6.4 percent net income margin on revenue of $37.5 billion in that period. This good news is exactly what the company needed, as it prepares to launch some major new products, including the all-new 2021 F-150, the all-electric Mustang Mach-E, and the highly anticipated Bronco. The company says the solid third-quarter performance is due to "a combination of great operating execution; benefits from focusing on its strengths in high-demand, profitable vehicles; and a reversal of business effects from the coronavirus pandemic."
These factors, along with Ford Credit's best performance in 15 years has resulted in a company adjusted EBIT (earnings before interest and taxes) margin of 9.7%, five points higher than last year, and well above Ford's target of 8 percent. "We know that there's huge value to be unlocked as we turn around our automotive operations," said Jim Farley, Ford's president and CEO. "There will be additional opportunity when we start growing again, which we will do with products and services customers can't resist."
Farley has outlined key points for Ford's growth strategy including innovation and introducing "great products and services," raising the quality of the products it offers the public, and allocating capital to sustainable practices such as the development of EV technology.
During the third quarter, Ford generated $6.3 billion in adjusted free cash flow and ended with cash of around $30 billion and total liquidity of $45 billion after paying a corona-induced revolving loan. "Challenges from the coronavirus were real and some risks still linger," said John Lawler, Ford's CFO. "Throughout the pandemic, we've prioritized the safety of our people, the needs of our customers, and the strength of our balance sheet, and that helped us post a solid quarter."
Ford also gained one point of market share in the US, with the ever-popular Ford F-Series gaining 1.7 points in market share. With a host of exciting new models on the horizon, Ford's future is looking bright.