Ford Motor Company F issued new guidance after withdrawing it amid the UAW strike, highlighting its "absolute confidence" in the commitment to the long-term potential of its Ford+ plan to generate growth and value.
The company now expects full-year adjusted EBIT of $10.0 billion-$10.5 billion, with adjusted free cash flow of $5.0 billion-$5.5 billion.
The company's adjusted EBIT would include $1.7 billion in strike-related lost profits – $1.6 billion from Q4 – owing to interruptions in production of high-margin trucks and SUVs and, in turn, vehicle wholesales about 100,000 units lower than planned.
Also Read: From Tesla To Toyota: UAW Launches Ambitious Campaign To Unionize Top Auto Players
Though affected U.S. operations have been restarted, guidance reflects effects of strike-related manufacturing disruptions on wholesales and revenue.
The new U.S. labor agreement with the UAW is expected to cost $8.8 billion over the life of the contract, with gross wages, accelerated wage progression and cost of living adjustments representing the largest three elements of that total.
The cost effect is anticipated to be about $900 per vehicle by 2028 – or about 60 to 70 basis points of adjusted EBIT margin – which Ford will work to offset through higher productivity and lower expenses.
Ford generated $4.9 billion of net income and $9.4 billion in adjusted EBIT through the first three quarters of the year, prior to full effects of the work stoppage, the company said.
Price Action: F shares are trading higher by 1.32% to $10.73 premarket on the last check Thursday.
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