Ford Reports $2B Net Loss in 2022, $1.3B Net Gain in Q4

Ford Motor Co. in Dearborn released its fourth quarter (Q4) and full-year 2022 financial results, showing Q4 earnings before interest and taxes (EBIT)-adjusted of $2.6 billion, up from $2 billion last year, but still posting a full-year net loss of $2 billion,
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Ford posted a net loss of $2 billion in 2022. // Courtesy of Ford Motor Co.
Ford posted a net loss of $2 billion in 2022. // Courtesy of Ford Motor Co.

Ford Motor Co. in Dearborn released its fourth quarter (Q4) and full-year 2022 financial results, showing Q4 earnings before interest and taxes (EBIT)-adjusted of $2.6 billion, up from $2 billion last year, but still posting a full-year net loss of $2 billion,

“I’m excited about 2023, which is pivotal for us,” says Jim Farley, president and CEO of Ford. “We’ve got clarity and ambition with the Ford+ plan, a strong team carrying it out, and a lineup of great products and customer experiences that’s getting even better. We should have done much better last year. We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.”

Ford revenue for Q4 and all of 2022 reached $44.0 billion and $158.1 billion, respectively. For the same periods, the company had net income of $1.3 billion in Q4. The results were below Ford’s expectations, attributable, in part, to execution issues in an environment with supply chain and production instability, resulting in higher costs and lower-than-planned volumes.

Operating cash flow for the year was $6.9 billion and full year adjusted free cash flow was $9.1 billion. The company ended 2022 with a continued strong balance sheet: $32 billion in cash and $48 billion of liquidity.

“We have great flexibility to invest in the Ford+ growth plan and return capital to shareholders at the same time,” says John Lawler CFO of Ford. “Going forward, we intend to target distributions of 40 to 50 percent of free cash flow.”

In North America, EBIT for the year was up $1.8 billion to $9.2 billion — with a margin of 8.4 percent — on higher net pricing and increased volume, partially offset by commodities and other inflation-related cost increases.

More than 650,000 F-Series trucks shipped during the year, making it America’s best-selling truck for 46 straight years, and top vehicle of any type for 41 years.

In November, producing the 150,000th Mustang Mach-E in less than two years, a milestone to scaling Ford’s global EV production to a run rate of 600,000 annually by the end of 2023 and more than 2 million by the end of 2026.

Ford’s full-year EBIT in Europe was slightly above break-even, but below its expectation. In an example of strategic strength in the region, the company had the top commercial-vehicles brand for a record eighth straight year, even ahead of Ford Pro introducing several all-new Transit vans in European markets later this year.

The company reported a full-year loss of about $600 million in China, where it’s investing in EVs in the world’s most advanced market for such products. In South America, EBIT exceeded $400 million. The International Markets Group, which operates in dozens of countries around the world, earned more than $600 million, helped by the launch of the all-new Ranger pickup truck.

With the start of 2023, Ford is now organized by and will report operating performance based on the three new customer-centered business segments – Ford Blue, Ford Model e, and Ford Pro – rather than as a single automotive business with regional details, a major strategic shift the company first previewed last March.

“This goes way beyond how we account for the business,” says Lawler. “This is a fundamental change in how we think, make decisions and run the company — so we’re creating great experiences and value for customers and fulfilling the huge promise of Ford+.”

In 2023, Ford currently expects to earn $9 billion to $11 billion in adjusted EBIT, presuming seasonally adjusted annual rates of about 15 million vehicles in the U.S. and about 13 million in Europe. The company anticipates generating about $6 billion in adjusted free cash flow, which assumes no distributions from Ford Credit.