DETROIT — Ford Motor Co. posted a surprising $3.26 billion net profit in the first quarter on Wednesday, but the company said a worsening global computer chip shortage could cut its production in half in the current quarter.
Excluding non-recurring items, the Dearborn, Michigan, automaker made 89 cents per share from January through March, trouncing Wall Street estimates of 22 cents per share. Quarterly revenue was $36.23 billion, beating analysts' estimates of $36.13 billion, according to FactSet.
Chief Financial Officer John Lawler attributed the large profit to Ford's years of restructuring to make the company leaner, as well as higher prices for its vehicles due to tight inventories.
The second quarter should be the low point for the chip shortage, Lawler said, but he expects it to linger into the second half with a 10% production cut. That means Ford won't be able to make up for any lost production this year.
The company expects to lose production of 1.1 million vehicles for the year, up from an estimate of 200,000 to 400,000 earlier in the year.
Ford now predicts full-year pretax income to be between $5.5 billion and $6.5 billion, including a $2.5 billion cut due to the chip shortage. In February it estimated the shortage could reduce its full-year pretax earnings by $1 billion to $2.5 billion.
Lawler said the company's decision to allocate capital to develop more higher-profit trucks and SUVs is paying off with higher margins.
"You're seeing that flow through with the strong products," he said.
Since 2019, Ford's average vehicle sales price is up $1,900 over the industry average, he said.
Nearly all automakers are struggling with the chip shortage, caused by semiconductor makers switching their factories to more profitable consumer-electronics processors when auto plants closed due to the coronavirus last year. The auto factories came back faster than expected, but the chip makers couldn't quickly switch their factories back to automotive-grade chips. Industry executives say the shortage won't end until the third quarter.
The first-quarter earnings included a noncash gain of $902 million on Ford's investment in electric vehicle startup Rivian.
The large profit reversed a nearly $2 billion net loss from a year ago, when Ford burned through cash at the start of the coronavirus pandemic.