Ford Reaffirms $5 Billion-$6 Billion Cash Flow Goal as Cost Pressures Top $2 Billion
Updated
Updated · Trefis · Jul 8
Ford Reaffirms $5 Billion-$6 Billion Cash Flow Goal as Cost Pressures Top $2 Billion
1 articles · Updated · Trefis · Jul 8
Summary
Ford kept its full-year adjusted free cash flow target at $5 billion to $6 billion even after first-quarter adjusted free cash flow swung to a $1.9 billion outflow.
Commodity costs now seen at just above $2 billion for the year drove much of the concern, about $1 billion higher than Ford’s earlier estimate.
Quarterly adjusted EBIT of $3.5 billion was also flattered by a $1.3 billion one-time tariff refund, reinforcing investor doubts about the durability of Ford’s cash generation.
Ford argues its core businesses can absorb the pressure: Ford Blue’s full-year profit outlook was raised by $500 million, while Ford Pro software subscriptions climbed 30% to 879,000.
At about $13.56 a share, Ford still trades on a trailing free-cash-flow yield of 17.6%, leaving investors focused on whether management can prove the first-quarter cash burn was temporary.