What happened

Shares of Ford Motor Company (F 0.69%) were lower in early-afternoon trading on Friday after the company reported fourth-quarter earnings that fell short of Wall Street estimates. As of 12:30 p.m. ET, Ford's shares were down about 10.7% from Thursday's closing price.

So what

Ford reported its fourth-quarter results after the U.S. markets closed on Thursday, and they were hit and miss -- at least from Wall Street's perspective. While revenue of $37.7 billion came in above the Street's estimate, the more critical number -- adjusted earnings per share -- fell short: $0.26 per share, versus the consensus estimate of $0.45.

Traders didn't like that, of course. But Ford also had some good news to share. Among the highlights:

  • Full-year adjusted earnings before interest and taxes (adjusted EBIT) was $10 billion, well within the guidance range ($9.6 billion to $10.6 billion) provided by Ford in October. 
  • Ford's South American business unit has returned to profitability following a restructuring. A similar effort in Europe fell short of profitability in the fourth quarter because of chip-related production disruptions, but the company has made demonstrable progress in the region.
  • Ford Credit reported pre-tax profit of $1.06 billion for the quarter, up from $912 million in the year-ago period, with credit losses "near record lows," per CFO John Lawler.

Simply put, despite the earnings "miss," Ford's business is still very much heading in the right direction. The bullish investment case for the stock remains intact. 

A 2022 Ford F-150 Lightning Pro, the commercial-fleet version of the electric pickup, on a construction site.

Ford is still wrestling with COVID-related supply-chain issues, but the company confirmed that the electric F-150 Lightning pickup is still on track to launch this spring. Image source: Ford Motor Company.

Now what

Ford's outlook for 2022 is upbeat. The company expects adjusted EBIT of between $11.5 billion and $12.5 billion for the full year, with strong positive free cash flow as its global business units reap the benefits of the profit-enhancing "redesign" that has unfolded over the past few years. 

But there's one caveat that auto investors should keep in mind: Ford expects the first quarter of 2022 to be a relatively tough one, as it's still working through COVID-related parts shortages that are constraining production.