Analyst Note| David Whiston, CFA, CPA, CFE |
Management expects Ford’s first quarter results to be the best quarter of 2021. Adjusted EBIT including Ford Credit of $4.8 billion was a record, and adjusted diluted EPS of $0.89 far surpassed the Refinitiv consensus of $0.21. We are leaving our fair value estimate of $15 unchanged. Management made no mention of resuming the dividend. It guided second quarter as having similar wholesale problems to second quarter 2020, but this time due to the semiconductor shortage. We expect the dividend to be reinstated in the second half of the year. Ford’s automotive cash of $31.3 billion should enable the company to survive a rough second quarter still in solid financial health. In second quarter 2020, Ford burned nearly $5 billion, excluding Ford Credit, so a similar horrible second quarter does not permanently impair Ford, in our view. The second half of 2021, furthermore, should see a recovery.