Ford Motor delivered an earnings beat Tuesday, along with a stronger-than-expected outlook as cost cuts and higher profits from its commercial car business are expected to more than offset the losses from electric vehicles. The cherry on top: Management announced a supplemental dividend of 18 cents per share. Automotive revenue increased 3% year over year, to $43.2 billion, beating analysts’ forecasts of $40.2 billion, according to estimates compiled by LSEG. Adjusted earnings-per-share (EPS) fell 43% to 29 cents, beating estimates of 14 cents per share, LSEG data showed. Earnings before interest and taxes (EBIT) dropped 59% from last year to $1.05 billion but was better than the $936 million analysts forecasted. Ford shares jumped roughly 6% in after-hours trading in reaction to the positive results. Bottom line What a difference a quarter can make. In Ford’s last go around, we were concerned that management took its eye off the ball and let operations suffer as it prepared for the UAW strikes. In the third quarter, Ford recorded a $1.2 billion increase in costs associated with warranties, a result that was simply unacceptable to us. The headwind overshadowed the beginning of a more adaptable and flexible Ford, one that isn’t afraid to align production toward high-margin ICE (internal combustion engine) and hybrid vehicles while moderating the pace of investment in unprofitable EVs. As we’ve said before, we want Ford to maximize its profits and cash flows while carefully and slowly growing its EV business. It’s no easy task, but this is in the best interest of shareholders. As Ford gets a better handle on its quality and warranty issues, we’re starting to see how profitable it can be even in a flattish environment for the car industry. A lot of that credit belongs to Ford Pro, which increasingly looks undervalued by the market for its profit potential. And we’ve always liked the cash flow here. To push Ford’s payout ratio to 50% for the year, it announced an…
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