Ford Motor Co. in Dearborn Reports Revenue Up 11% to $176B in 2023

Ford Motor Co. in Dearborn reported its 2023 revenue was up 11 percent to $176 billion and that its Ford+ operation, in its first full year of focusing on customer-centered business segments in 2023, was able to adapt to the needs of customers while generating growth and profitability for the company.
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Ford HQ
Ford Motor Co. credits its Ford+ operation for the company’s 11 percent revenue increase in 2023. // Photo courtesy of Ford

Ford Motor Co. in Dearborn reported its 2023 revenue was up 11 percent to $176 billion and that its Ford+ operation, in its first full year of focusing on customer-centered business segments in 2023, was able to adapt to the needs of customers while generating growth and profitability for the company.

“We’re the only company that gives customers such a wide range of choices — gas, hybrid, and electric vehicles — made possible by our Ford+ plan and the talented team that’s carrying it out,” says Jim Farley, president and CEO of Ford. “Ford is creating a product, software, and services powerhouse with huge potential for this year and the long haul.”

Net income in 2023 improved year-over-year to $4.3 billion; adjusted EBIT of $10.4 billion was essentially flat year-over-year and at the high end of guidance that Ford provided following ratification of its new contracts with the UAW in the U.S. and Unifor in Canada.

Profitability and cash flow from outside North America in 2023 represented a reversal from a combined loss of about $2 billion in 2020. The improvement in those markets came from lower capital approaches in China and elsewhere, and continued strength of the Ranger midsize pickup and Everest SUV.

Operating cash flow of $14.9 billion for all of 2023 was solid, the company says; adjusted free cash flow of $6.8 billion was “significantly better” than the company’s outlook of $5 billion to $5.5 billion. Ford’s balance sheet remains strong, it says, with nearly $29 billion in cash and more than $46 billion in liquidity at the end of the year.

Ford’s fourth-quarter 2023 revenue was $46 billion, an increase of 4 percent from the same period a year ago on comparable vehicle volumes.

Farley says a net loss of $526 million in the period was attributable to a $1.7 billion pretax, non-cash accounting loss related to the remeasurement of pension and other postretirement employee benefits plans. Adjusted earnings before interest and taxes, or EBIT, totaled $1.1 billion.

CFO John Lawler says that the company’s cash flow and disciplined capital allocation enabled the company to make “vital investments in Ford+ while also returning value to shareholders – targeting distributions of 40 percent to 50 percent of adjusted free cash flow.”

Accordingly, the company declared a first-quarter regular dividend of 15 cents per share and a supplemental dividend of 18 cents per share. The dividends are payable March 1 to shareholders of record at the close of business on Feb. 16.

Lawler says Ford will improve capital efficiency by both selectively reducing investments and raising the bar on expected returns for initiatives that the company greenlights.

“The objective is to improve total adjusted return on invested capital from about 14% in 2023 to 20 percent over the next couple of years,” says Lawler.  “Simply ‘good’ isn’t good enough and investments are going to projects that have credible plans to deliver their targeted returns.”

Lawler says EVs provide a great illustration of this strategy.

“EVs are here to stay, customer adoption is growing, and their long-term upside is central to Ford+,” says Lawler. “The customer insights we’re getting by being an early mover in electric pickups, SUVs and commercial vehicles are invaluable – especially as we’re developing next-generation EVs that are going to surprise customers and be profitable within a year of launch.”

With mainstream customer adoption of EVs happening at a slower rate than the industry expected, however, Ford stated months ago that it’s deferring certain capital investments in EVs until they’re justified by demand and prospects for acceptable returns.

Ford Pro — which works to understand the needs of and developing solutions for commercial customers — produced full year revenue growth of 19 percent and EBIT of $7.2 billion, more than double in 2022, with a margin of 12.4 percent.

Farley called Ford Pro “the global leader in work” with its Super Duty trucks, Transit vans, and high-value services that help commercial customers accelerate their productivity.  He said that the segment is on track to an EBIT margin in the mid-teens by further extending Ford Pro’s substantial competitive advantages.

Commercial customers and Ford are benefiting from the 2023 launches within Ford Pro’s primary vehicle franchises — all-new Super Duty trucks in North America and Transit Custom vans in Europe.  In the fourth quarter, software subscriptions increased by nearly 50 percent from the prior year; orders for mobile repairs more than doubled.

Ford Blue, the company’s gas- and hybrid-vehicle business, reported a full year 8 percent revenue gain that outpaced wholesales growth of 3 percent, EBIT of $7.5 billion and a margin of 7.3 percent.  Hybrid vehicles — especially hybrid versions of the F-150 and compact Maverick pickups — last year accounted for 13 percent of Ford Blue’s U.S. volume.

“We sold about 700,000 hybrids worldwide over the past three years and Ford is the only brand in the top three in both hybrids and EVs in the U.S.,” Farley says. “We’re expecting double-digit hybrid growth again in 2024.”

By the end of 2024, 60 percent of Ford Blue’s global vehicle lineup will have been refreshed. That includes a new version of the legendary F-150 coming soon — part of the company’s F-Series of trucks, the best-selling vehicle in the U.S. for 47 straight years.

Ford’s pickup leadership is broadly based and worldwide, comprising F-Series, including Ford Pro’s Super Duty lineup; Ranger; and the compact Maverick.  In its 2024 buying guide, Consumer Reports named Maverick the best small truck and Maverick Hybrid the top fuel-efficient truck in its 2024 Buying Guide.

Ford Model e’s wholesales and revenue were both up at double-digit full-year rates.  The start-up segment incurred a full-year EBIT loss of $4.7 billion, reflecting an extremely competitive pricing environment, along with strategic investments in the development of clean-sheet, next-generation EVs.

Sales volumes of the F-150 Lightning pickup and Mustang Mach-E SUV both were up year-over-year and respectively the top-selling electric pickup and No. 3 most popular EV of any type in the U.S. for 2023.

Ford continued to build momentum behind its software-enabled services.  Total paid software subscriptions across all segments rose 8 percent sequentially in the fourth quarter to about 630,000.

During 2023, the company expanded availability of Ford’s BlueCruise advanced driver-assistance system to Great Britain, Germany, and Spain, a first in that country — in addition to the U.S. and Canada.  More than 290,000 BlueCruise-equipped Ford and Lincoln vehicles are now on the road, with customer use exceeding 2.3 million hours and 156 million hands-free miles – and counting.

Ford Credit’s full-year earnings before taxes of $1.3 billion were in line with the company’s expectations, though lower than a year ago.  Among the influences were higher borrowing costs, lower auction values and higher credit losses – all of which were anticipated.

In other news, earlier this week Ford, as part an alliance of the country’s biggest names in vehicle and engine manufacturing and supply, the Heavy-duty Leadership Group, released a joint “Statement of Principles” calling on the Environmental Protection Agency to finalize a rule by March 31 to implement new greenhouse gas standards for heavy-duty commercial vehicles.

The Heavy-duty Leadership Group companies, which include BorgWarner, Cummins, Eaton, and Ford, called for no delay in EPA’s planned model year 2027 start date, rejecting earlier proposals to delay the start of the EPA rule until model year 2030.

The group also stated the need for regulatory certainty and clear market signals, opposing a so-called “hard-wired off ramp” under which the EPA standards automatically would end or be weakened if certain infrastructure metrics were not achieved.

The companies instead urged the EPA to conduct an ongoing EPA “technical assessment” of infrastructure development, battery costs, rare minerals sourcing and other critical issues.

The companies stressed they are willing to meet the challenge of investing in advanced technologies, which are necessary to make progress toward meeting new EPA Greenhouse Gas standards.

The group’s statement of principles emphasizes that each Heavy-duty Leadership Group company is committed to “aggressively cutting GHG emissions with near-term milestones and long-term net zero goals.” The group also stressed the need for a “whole government approach” to partner with private industry to meet the new EPA standards.

The standards would complement the criteria pollutant standards for model year 2027 and beyond heavy-duty vehicles that the EPA finalized in December 2022. According to the EPA, the projected net benefits of the heavy-duty proposal range from $180 billion to $320 billion.