Why Ford Stock Fell On Friday
What happened
Shares of Ford Motor Company (NYSE: F) tumbled 7.6% on Feb. 3 after the auto giant's earnings report frustrated shareowners.
So what
Ford's revenue rose 17% year over year to $44 billion in the fourth quarter. The automaker sold 1.15 million vehicles during the quarter, an increase of 4% from the prior-year period. Higher average selling prices also contributed to Ford's gains.
Still, Ford expected to sell more cars and trucks. Supply chain bottlenecks continue to hamper the company's manufacturing operations.
"We should have done much better last year," CEO Jim Farley said in a press release. "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."
All told, Ford's net income plummeted 89% to $1.3 billion. A steep drop in the value of its stake in electric vehicle upstart Rivian (NASDAQ: RIVN) was partly to blame. Ford said it sold most of its shares in Rivian last year.
On an adjusted basis, Ford's earnings per share came in at $0.51. That fell well short of Wall Street's estimates, which had called for adjusted per-share profits of $0.62.
Now what
Ford will use some of the proceeds from the sale of its Rivian stock to pay out a special dividend of $0.65 per share to shareholders of record at the close of business on Feb. 13. That's in addition to its regular quarterly dividend of $0.15 per share.
"We have great flexibility to invest in the Ford+ growth plan and return capital to shareholders at the same time," chief financial officer John Lawler said. "Going forward, we intend to target distributions of 40% to 50% of free cash flow."
Ford expects to generate adjusted free cash flow of roughly $6 billion in 2023.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
