Ford (NYSE:F) is a leading automobile company, not only in the U.S. but also globally, with annual sales reaching more than $150 billion in 2019.
The company specializes not only in the design of automobiles but also in the manufacturing as well as marketing and servicing of a full line of 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.
Ford’s Total Revenues (TTM)
From a trailing 12-months (TTM) basis, Ford’s revenue has trended downward and reached only $130 billion in 2020 Q2.
The Q2 2020 result represents a year-over-year decline of 18%.
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.
Similarly, Ford Credit’s revenue has also been declining, but not as severe as the automotive segment. In 2Q 2020, Ford Credit’s revenue decreased 13% year-on-year to $2.7 billion.
Between 2018 and 2020, Ford Credit’s 2Q 2020 result was one of the worst, driven mainly by lower leasing and finance interest income in the same quarter.
Ford’s Automotive Revenue (TTM)
From a trailing 12-months (TTM) perspective, Ford’s automotive revenue was seen trending downward since 2018, declining to its lowest at $118 billion as of 2020 2Q.
Ford Credit’s Revenue (TTM)
Likewise, Ford Credit revenue also declined to its lowest at only $11.8 billion in 2020 2Q on a TTM basis.
Prior to 2020, Ford Credit revenue was actually trending upward and reached $12.3 billion, its peak figure during 2019 before sliding steadily towards its new low in 2020.
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 International Market Group (IMG).
Based on the chart, North America contributed the largest portion at $11 billion to Ford, making up slightly more than 65% of automotive revenue in 2Q 2020.
The 2nd place goes to Europe where the region’s automotive sales of $3.6 billion in 2020 2Q made up slightly more than 20% of Ford’s automotive revenue.
Ford’s China automotive revenue was around $800 million in 2Q 2020 whereas South America’s revenue was the lowest at only $242 million in the same quarter.
The revenues from all regions seem to decline in Q2 2020, except for China’s portion. The rebound in sales from China may suggest a faster recovery in the country’s automobile sector than anywhere else in the world.
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.
As seen from the chart, Ford’s sales from China had bounced off its low from the prior quarter and reach $800 million in 2Q 2020, suggesting a possible V-shape recovery in the Chinese automobile market.
While we are seeing a notable higher revenue from China in 2Q 2020, the result was still far lower than its historical average from 2018 to 2020.
In contrast, South America’s revenue was devastated in 2Q 2020, plunging to less than $300 million in the same quarter.
Ford’s Revenue 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 the 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 growth of -4% and -11% in 1Q20 and 2Q20, 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 Q2 2020, Ford’s automotive sector was seen tumbling more than 50% year over year.
Since the automotive segment contributes the largest portion of revenue to Ford, it’s not surprising to see that the company’s total revenue declines at the same rate as the automotive segment.
In short, Ford has the worst revenue growth rates in 2020.
In summary, Ford has seen its revenue tumbling the most in all business segments and all regions since 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 has been planning for years.
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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