DETROIT (Reuters) -Ford Motor Co on Wednesday reported better than expected second-quarter profit and reaffirmed its profit outlook for the year, but said management is “actively looking” at how to offset surging costs.
Ford shares were up 6.8% in after-hours trade.
Results were driven by higher-margin vehicles, partially offset by higher commodity costs and expenses, the company said. Ford said it expects commodity costs to rise by $4 billion for the year.
Ford reaffirmed its previous guidance for full-year results, including adjusted earnings before interest and taxes (EBIT) of $11.5 billion to $12.5 billion, up 15% to 25% from last year, and adjusted free cash flow of $5.5 billion to $6.5 billion.
Ford Chief Financial Officer John Lawler said the automaker is beginning to cut costs across operations, but would not discuss details. “We’re not currently cost competitive,” he told reporters on a conference call. The company’s goal is to reduce costs by $3 billion over several years, he said.
“We’re in much better shape now than at any other time heading into a potential recession,” Lawler said.
Profit increased marginally to $667 million, with diluted earnings per share of 16 cents versus 14 cents a year earlier. Adjusted non-GAAP earnings of 68 cents a share beat consensus of 45 cents and last year’s 13 cents.
Ford said revenue for the quarter jumped to $40 billion, up sharply from $26.8 billion a year ago when supply-chain problems slashed production.
(Reporting by Joe White and Paul Lienert in DetroitEditing by Chris Reese and Matthew Lewis)