Ford Targets 8% Adj. EBIT Margin In 2020; $11.5 Bln Of Efficiency Opportunities

(RTTNews) - Ford Motor Company (F) announced that its fitness initiatives are driving an improved outlook. The company is now targeting an 8 percent adj. EBIT margin in 2020, two years earlier than previously anticipated. Ford is also targeting return on invested capital to substantially increase by 2020. The accelerated 2020 targets are enabled by $11.5 billion of cost and efficiency opportunities that span the entire company and include engineering, marketing and sales, manufacturing, material cost and IT.

Ford said the company also expects to improve its capital efficiency. The company had previously expected to spend about $34 billion in capital from 2019 to 2022 and has now cut that by $5 billion, to $29 billion over the same period.

Ford also announced that Ford Credit plans to maintain its managed receivables for the foreseeable future at the same level as it ended the quarter, in order to maintain a strong overall risk profile for Ford.

For the first-quarter, the company delivered increased revenue, up 7 percent year over year to $42.0 billion, and net income of $1.7 billion, up 9 percent year over year, more than explained by a lower tax rate. Company adjusted EBIT was $2.2 billion, down from a year ago, due to commodity cost increases and adverse exchange. Adjusted earnings per share was $0.43, compared to $0.40, prior year.