Ford posts massive earnings miss as warranty issues weigh on results

DETROIT — Ford Motor came in well short of Wall Street’s second-quarter earnings expectations, while beating on revenue, due to warranty issues that have plagued the automaker for several years now.

The automaker maintained its 2024 earnings guidance, disappointing some investors who had hoped for a hike.

Shares of the automaker were down by 9% after markets closed on the results as well as the company.

Here’s how the company did, compared with estimates from analysts polled by LSEG:

• Earnings per share: 47 cents adjusted vs. 68 cents adjusted
• Automotive revenue: $44.81 billion vs. $44.02 billion

The Detroit automaker said its profitability was affected by needed increases in its warranty reserves used to pay for issues with vehicles that are covered under new vehicle warranties.

Ford said recent initiatives to improve quality and vehicle launches are paying off, and are expected to help bring down future warranty costs.

Ford’s stock is up about 15% this year, as pricing in the automotive industry has remained more resilient than expected.

But as the industrywide transition to electric vehicles takes off more slowly than anticipated, the automaker has adjusted its product plans to focus less on all-electric vehicles and more on hybrids.

Most recently, Ford last week said it plans to expand production of its large Super Duty trucks to a Canadian plant that was previously set to be converted into an all-electric vehicle hub.

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