: Ford’s stock rallies after guidance reinstated, with new free-cash-flow view above expectations

United States

Shares of Ford Motor Co. Thursday, after the automaker provided new full-year guidance for profitability and free cash flow, after withdrawing guidance in October due to the labor strike.

Ford said it expects the new U.S. labor agreement with the United Auto Workers to cost $ 8.8 billion over the life of the contract, or about $ 900 per vehicle by 2028.

“Though affected U.S. operations have been restarted, guidance reflects effects of strike-related manufacturing disruptions on wholesales and revenue,” the company said in a statement.

The stock F, +2.12% got a 1.1% lift toward a one-month high in premarket trading. Through Wednesday, the stock had climbed 9.2% since Nov. 9, when it closed at the lowest price ($ 9.70) since Jan. 11, 2021, but had still lost 16% since the strike began on Sept. 15.

Ford now expects 2023 adjusted earnings before interest and taxes of $ 10.0 billion to $ 10.5 billion. Before guidance was withdrawn in October, the company said in July that it expected adjusted EBIT of between $ 11 billion and $ 12 billion.

And Ford now expects adjusted free cash flow of between $ 5.0 billion and $ 5.5 billion, which is down from previous guidance of between $ 6.5 billion and $ 7 billion, but above the FactSet consensus of $ 4.26 billion.

Ford’s announcement comes a day after rival General Motors Co. GM, +9.41% reinstated 2023 guidance, and also announced a $ 10 billion accelerated stock-repurchase program and a 33% increase to its dividend.

Ford Chief Financial Officer John Lawler is scheduled to speak at the Barclays Global Automotive and Mobility Tech Conference later Thursday, where he will outline 2023 guidance.

Ford’s stock has lost 8.9% year to date through Wednesday, while GM shares have declined 5.6% and the S&P 500 SPX, -0.09% has gained 0.8%.