Ford results were boosted by strong fleet sales that offset weakness in electric autos
Ford results were boosted by strong fleet sales that offset weakness in electric autos AFP

Strong sales in Ford's fleet business offset deep losses in electric vehicles where the Detroit auto giant has delayed some investments, according to results released Wednesday.

Profits were $1.3 billion in the first quarter, down 24 percent from the year-ago period on revenues of $42.8 billion, up 3.1 percent.

The clear outperformer among Ford's three divisions was Ford Pro, which is geared towards small businesses, large companies and government customers.

"All three of them are driving white hot demand for our vehicles and services right now," Chief Executive Jim Farley told analysts on a conference call.

Farley said Ford Pro has many van and truck options for varying customer needs, as well as a strong service repair network.

The customer in fleet is "fundamentally different than retail," said Farley. "Our retail customers .. are not doing roadworks and 5G infrastructure build out."

But on the flip side, Farley described Ford's electric vehicle business as a "huge drag" due to an oversupply of vehicles that has forced Ford, Tesla and others to cut prices on EVs.

The industry overbuilt in response to robust demand early on for EVs from enthusiasts. Once sales from this cohort ebbed, demand in the broader population was not nearly as strong. Ford executives said.

Following a loss in the first quarter in EVs, Ford is on track for an operating loss of between $5 billion and $5.5 billion in EVs.

The automaker in early April pushed back to 2027 from 2025 the launch of a new EV model to be built at a revamped plant in Oakville, Ontario.

Chief Financial Officer John Lawler described pricing of EVs as even weaker than expected, saying "the revenue keeps dropping faster than we're able to drive out cost."

While Ford has deferred some EV plans, the automaker has been building hybrid capacity in response to strong demand. Ford is on track for 40 percent growth in hybrid sales in 2024.

Hybrids are part of Ford Blue, where the company houses internal combustion offerings. That business had operating profits of $900 million during the quarter.

Shares of Ford rose 3.3 percent in after-hours trading.