Ford Motor Company (NYSE:F), a leading automobile company not just in the U.S. but also globally, has annual sales reaching more than $127 billion in 2020.
Ford Motor specializes not only in the design of vehicles but also in the manufacturing as well as marketing and servicing of a full line of Ford and Lincoln cars, trucks and SUVs.
Ford is now pursuing leadership positions in the electric vehicle space by investing heavily in the design of electric vehicles and batteries, hoping to get a slice of the growing EV market.
In this article, we will take an in-depth look into Ford’s total revenue and the respective growth rates.
Additionally, we will also look at the company’s revenue breakdown by segment and by region (country) to find out where Ford’s sales grew or declined the most.
Let’s move on!
Ford’s Total Revenues (Quarterly)
Let’s first look at Ford’s total revenue by quarter which is shown in the chart above.
The total revenue is the aggregate of all revenue segments and all regions around the world.
From 2018 to 2020, Ford’s total revenue was relatively stable at an average figure of $38 billion per quarter.
However, the sales figures started to plunge dramatically in 2020. In 1Q 2020, Ford’s quarterly total revenue tumbled 15% year-on-year to $34 billion.
The plunge continued in 2Q 2020 when Ford reported only $19 billion of sales revenue, almost half of what it made a year earlier.
According to Ford, sales in 2020 were largely disrupted by the COVID-19 outbreak, as production was shut down and a slower demand around the world.
However, Ford’s sales bounced back significantly in 3Q and 4Q 2020 at $37 and $36 billion, respectively.
The turnaround has been driven primarily by higher vehicle demand for large and mid-size trucks and SUVs during the age of the pandemic, as air travel has been mostly standstill throughout 2020.
Ford’s Total Revenues (TTM)
The quarterly plot may not clearly show the trend of Ford’s sales from a long-term perspective.
As such, the trailing 12-month (TTM) plot is created above.
From a TTM basis, Ford’s revenue has trended downward and reached only $127 billion in 2020 Q4, the lowest in the last 3 years.
The Q4 2020 result represents a year-over-year decline of as much as 19%.
The TTM result would have been much worse if not for the V-shape recovery seen in 3Q and 4Q 2020 over the quarterly plot.
While Ford’s quarterly revenue may have made a comeback by the end of 2020, the TTM result shows otherwise, caused mainly by one of the worst sales drops in 2020 2Q.
Ford’s Revenue Breakdown by Segment
The chart above shows Ford’s total revenue breakdown by segment from 2018 to 2020.
The reportable business segments disclosed in Ford’s financials are Automotive, Ford Credit and Mobility.
According to the chart, Ford’s automotive segment is the largest among the 3, contributing on average, 90% of sales to total revenue.
The 2nd place goes to Ford Credit which contributes roughly 9% of sales to total revenue.
Ford’s Mobility revenue contribution has been negligible at less than 1% of total revenue.
Ford’s automotive revenue was seen declining since 2018, dropping significantly to only $16.6 billion in 2020 2Q.
Ford attributed the lower automotive sales to the COVID-19 outbreak started early in 2020, which then led to most of its manufacturing facilities all over the world being temporarily shuttered.
However, Ford’s automotive sales were seen bouncing back in 3Q and 4Q 2020 to more than $30 billion in each quarter, driven largely by the pent-up demand for the company’s large and mid-size SUVs and trucks.
Similarly, Ford Credit’s revenue has also been declining, but not as severe as the automotive segment. In 4Q 2020, Ford Credit’s revenue decreased 10% year-on-year to $2.7 billion.
Between 2018 and 2020, Ford Credit’s 4Q 2020 result was among the worst, driven mainly by lower leasing and finance interest income in the same quarter.
Ford’s Automotive Revenue (TTM)
From a trailing 12-month (TTM) perspective, Ford’s automotive revenue was seen trending downward since 2018, declining to its lowest at $116 billion as of 2020 4Q.
Year over year, the 2020 4Q result represents a decline of as much as 19%.
Ford’s latest TTM automotive revenue would have been much worse if not for the significant recovery seen in 3Q and 4Q 2020 over the quarterly plot.
Ford Credit’s Revenue (TTM)
Likewise, Ford Credit revenue also declined to its lowest at only $11.2 billion in 2020 4Q on a TTM basis.
Prior to 2020, Ford Credit revenue was actually trending upward and reached $12.3 billion, its peak figure in 2019 before sliding steadily towards its new low in 2020.
Year over year, the 2020 4Q result represents a decline of nearly 10%.
Ford’s Automotive Revenue Breakdown by Region
The chart above shows Ford’s automotive revenue breakdown by region from 2018 to 2020.
The reportable regions disclosed in Ford’s financials are North America, Europe, South America, China and the International Market Group (IMG).
Based on the chart, North America contributed the largest portion at $22 billion to Ford, making up slightly more than 65% of automotive revenue in 4Q 2020.
The 2nd place goes to Europe where the region’s automotive sales of $7.1 billion in 2020 4Q made up slightly more than 20% of Ford’s automotive revenue.
Year over year, Ford’s North America declined as much as 13% while Ford’s Europe sales were flat in 2020 Q4.
Ford’s China automotive revenue was around $795 million in 4Q 2020 whereas South America’s revenue was at about the same level at $862 million in the same quarter.
Ford’s Automotive Revenue Breakdown by Region – Only South America, China and IMG
To clearly show you how Ford’s automotive revenues from China, South America and IMG have performed with one another, I have stripped off revenues from North America and Europe.
Again, Ford reported $795 million in sales in China and $862 million in sales in South America in 2020 Q4.
Year over year, Ford’s revenues from all regions seem to decline in Q4 2020, except for the IMG’s portion.
The rebound in sales from the IMG may suggest a faster recovery in the automobile sector outside of the U.S.
Also, Ford’s China sales declined the most in 2020 4Q at more than 20%.
Ford’s Revenue By Segment YoY Growth Rates
The chart above shows Ford’s total revenue and revenue by segment year over year (YoY) growth rates.
Overall, Ford’s revenue growth in all segments from 2019 to 2020 has plunged to negative territories, suggesting that the company’s growth may have reached a plateau.
Even the mighty Ford Credit, the financial arm of the company, is not spared from the cyclical nature that is usually associated with automobile companies.
Ford Credit has been one of Ford’s stable and strong revenue generators, providing the company with consistent leasing and interest income for the company.
However, Ford Credit reported a revenue YoY decline of 9% and 10% in 3Q20 and 4Q20, respectively.
The decline in revenue was the most obvious in 2020 when all Ford’s segments reported double-digits negative growth rates, thanks largely to the coronavirus pandemic.
In Q4 2020, the worst may have been over across all revenue segments for Ford after experiencing the worst decline in sales in 2Q 2020.
In short, Ford saw the worst revenue growth rates in 2020.
Ford’s Revenue by Region YoY Growth Rates
From a regional perspective, Ford’s sales were seen declining in all regions in Q4 2020, except for the IMG where international sales are lumped together.
As shown in the chart, Ford China reported the worst year over year decline in 2020 4Q at 20%.
Both North America and South America reported a sales drop of about 10% in 2020 4Q on a year over year basis.
Again, the worst may have been over for Ford as year-on-year growth rates started to bounce back in 2020 4Q, led by the IMG where it reported a growth of 10%.
In summary, Ford has seen its revenue tumbling the most in all business segments and all regions in 2020.
Has its stock price reacted to the contraction? Or the stock price has already reversed the decline in a contrarian bet.
Whatever it is, the year 2020 represents one of Ford’s worst fiscal year when it is heavily indebted while seeing its sales plunging to the lowest.
Nevertheless, Ford may survive through the crisis or even recover to prior growth, judging from the new product lineup in 2021/2022 that it is planning to roll out.
Ford’s recent electric vehicles bet may just be the perfect catalyst that the company has been looking for.
For now, just keep your finger crossed and come back to this article every 3 months when it’s updated or sign up to our newsletter for the latest updates!
Credits and References
1. Financial figures in all charts on this webpage were obtained and referenced from Ford’s quarterly and annual filings between 2018 and 2020 which can be found in the following location: Ford shareholders page.
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