Business

To understand the significance of the drawn-out takeover battle for Spirit Airlines, a Florida-based ultra-low-cost carrier (ulcc), it helps to know something about one of the main protagonists. Even his opponents describe Bill Franke as brilliant. The entrepreneur is now in his 80s, but he once recounted how, on his first experience of air travel, as a young boy flying with his family to Paraguay in 1948, he had to suck oxygen from a tube as the Douglas dc-4 ascended over the Andes. It must have gone to his head. Since then he has become one of few people to have made billions out of aviation, despite the industry’s tumultuous ups and downs.His secret has been rigid adherence to the no-frills model: low basic fares, lots of add-ons, single-manufacturer fleets, fuel efficiency and strict cost-control. In 2006 his private-equity firm, Indigo Partners, took over Spirit, sold it in 2013 and bought Frontier Airlines, a ulcc based in Denver. Indigo has big stakes in Wizz Air, one of Europe’s biggest low-cost carriers, Volaris in Mexico and Jetsmart in South America. This year he went further, orchestrating Frontier’s $2.6bn cash-and-shares merger with Spirit. The aim was to create America’s fifth-largest airline, a jumbo-sized ulcc that would combine networks on either side of the United States with little overlap. It was Mr Franke at his intrepid best. Against him was a bigger-spending foe, though. JetBlue Airways, on the more gentrified end of low-cost air travel, had offered $3.7bn in cash for Spirit. On July 27th Spirit and Frontier called off their merger agreement. A day later JetBlue said it had agreed to buy Spirit. Whether the deal succeeds partly depends on the answers to two related questions.The first has to do with the zeal of President Joe Biden’s antitrust crackdown. His administration wants to usher in a new era of pro-competition litigation. Airlines are near the top of its hit list. The second question concerns the structure of the industry itself. Who could do more to bash down the prices of the high-fare heavyweights such as Delta, United and American Airlines? Is it the “tweeners” like JetBlue that call themselves low-cost but resemble full-service airlines? Or the insurgent ulccs that promise a Spartan model, grumpy passengers notwithstanding? In its campaign to inject more competition into American business, the White House has drawn attention to what it considers an overconcentrated domestic airline industry. The Department of Justice (doj) is on the warpath, too, on behalf of “travellers who cannot afford a plane ticket home to visit family”, as Jonathan Kanter, assistant attorney-general, has put it. He makes clear the doj is keen to “litigate, not settle”. Last year it sued to block the so-called Northeast Alliance between American and JetBlue in America’s lucrative north-east market. This would not only harm passengers in New York and Boston, it argued, but diminish JetBlue’s incentive to compete on fares with American across the country. The case goes to court in September. It is a big reason why Spirit has reservations about selling itself to JetBlue. It could drag on for months, leaving Spirit’s shareholders in limbo. There is a bigger reason, however. JetBlue’s takeover of Spirit would be even likelier to fall foul of the doj than either the Northeast Alliance or a Frontier-Spirit combo. The transaction could potentially be tied up for not months but years. JetBlue, after all, has its sights set on eliminating Spirit, America’s largest ulcc, simply to bag its aeroplanes, pilots and airport slots. JetBlue also intends to remove seats on aircraft it takes over from Spirit in order to offer its plusher service, which would inevitably push up average seat costs. Moreover, it will have less incentive to sell its lowest no-frills fares on routes formerly operated by Spirit.JetBlue counters that acquiring Spirit will make it a stronger rival to the network carriers, bringing down prices overall. It cites the “JetBlue effect”, which, it claims, forces legacy carriers to drop fares by about 16% on average when it goes head to head with them on non-stop routes. That may be so. Yet it ignores the impact of its higher fares on passengers who might have flown on Spirit. That leads to the second question: what industry structure would promote lower fares and more choice overall? JetBlue contends that its in-between model has three times more of a fare impact on legacy carriers than the ulcc model does on similar routes. Frontier calls this a fantasy. It notes that JetBlue itself has admitted to lowering fares in response to its no-frills rivals. It also argues that the “ulcc effect” drives fares down for longer than the JetBlue effect does.Moreover, it is possible that a bigger no-frills carrier would create demand from a new cohort of travellers, as has happened in Europe. Keith McMullan of Aviation Strategy, a consultancy, notes that in 2019 Spirit and Frontier had a combined domestic market share of 8%. That compares with a total of 20% in Europe for Ryanair, a Dublin-based no-frills giant, and Wizz Air. A combination of Frontier and Spirit, especially with the hundreds of new Airbus jets both firms have on order, might have increased that share significantly, making it as disruptive as its European counterparts. No thrills JetBlue shrugs off the threat its annihilation of Spirit would pose to America’s no-frills market. Its advisers argue that Frontier and other ulccs could quickly move into parts of America vacated by Spirit. That overlooks the troubled state of the industry since the covid-19 pandemic. Pilots, crew and engineers are thin on the ground (and off it). Travel chaos abounds. Normally, when the industry suffers a slump, a shake-out helps ease such bottlenecks in favour of low-cost airlines. That hasn’t happened yet, perhaps because overconcentration has cushioned the impact on the debt-laden legacy carriers. It may do soon. It is a pity that a combined Frontier and Spirit, chaired by the indefatigable Mr Franke, may not be around to fly the flag for creative destruction. ■Read more from Schumpeter, our columnist on global business:Meet Keyence, consultant to the world’s factories (Jul 23rd)Watch Russia’s Rosneft to see the new direction of global petropolitics (Jul 14th)What does the future hold for Reliance, India’s biggest firm? (Jul 9th) More

Having a female CEO at the helm of a company or chairing its board tends to make a huge difference, Altrata’s latest Global Gender Diversity report said Thursday.
About 28.2% of board members are female, the study found. However, many of these women were appointed to non-executive roles, which are often centered on board oversight rather than real decision-making power.
Only 5% of CEOs are women and 19.2% of corporate leadership team members are female, according to the BoardEx data.

shironosov | Getty Images

If you want to take a good guess at a company’s gender diversity record, you might want to first look at who its CEO or board chair is, according to the findings of a new study.
Having a female CEO at the helm of a company or chairing its board tends to make a huge difference, Altrata’s latest Global Gender Diversity report said Thursday.

The report examined BoardEx data to study female representation on the boards and leadership teams of 1,677 publicly traded companies in 20 countries as of the first quarter of this year.
It found that female representation on boards and in executive suites remains woefully low. And women who occupy roles on corporate boards often do not hold the most powerful positions.
About 28.2% of board members are female, the study found. However, many of these women were appointed to non-executive roles, which are often centered on board oversight rather than real decision-making power.
Breaking board representation down even further shows about 9.9% of executive directors are women and 8.9% of board chairs are female. About a third of non-executive posts are held by a woman, the report said.
The news from the C-suite is even worse. Only 5% of CEOs are women and 19.2% of corporate leadership team members are female. (Focusing only on S&P 500 companies yields a slightly higher proportion of female CEOs, at 6.8%, the report said.)

But having a woman at the top can ripple throughout the organization. Of the companies studied, U.S.-listed Organon had the highest proportion of female board members, while Singapore-based CapitaLand Integrated Commercial Trust tops the global list for corporate leadership.
Organon was spun off from Merck about a year ago, and focuses on women’s health. Its board is dominated by female directors, with Carrie Cox as its chair. She is joined on the board by eight other women and four men.
None of the companies studied had an all-female board, but 81 had all-male boards, as of June 2022.

The gains can be fragile. As CEOs come and go, the numbers fluctuate.
Take Ulta Beauty. It ranked second on the list of global companies with the most women in leadership positions. About 70% of its top management is female. But it’s worth noting its previous CEO was a woman. After Mary Dillon’s departure in June 2021, Dave Kimbell was promoted into the top post. At the moment, women still dominate Ulta’s leadership team and half its board is female, including its chair.
It’s also worth noting that a female CEO isn’t required to have gender diversity. Etsy, Bristol-Myers Squibb, Autodesk and Bath & Body Works all have male CEOs but still have a large percentage of women in key positions.
Still, the report said having women in the C-suite is key to having more woman ascend to the CEO ranks. CEOs are often recruited from among top leadership and having women in these roles is a reflection of a company’s ability to support and train them.
“If not enough women are gaining the corporate experience necessary to qualify for the most powerful board roles, such as CEO, this may slow the progress towards achieving equity at the highest levels of corporate power,” Maya Imberg and Maeen Shaban, the report’s lead authors, wrote.
Some have advocated quotas to boost diversity. Eleven of the 20 countries in the study have either mandatory or voluntary benchmarks for female board representation. As a result, these countries have corporate boards that are 32% female. By comparison, in the nine countries without such a requirement — which includes the U.S. — the average is 24%.

According to Altrata, female representation is poised to increase even further as a result of legislative efforts. For example, Spain has yet to reach its target of 40% of directors in publicly listed companies being women. Right now, slightly more than a third of directors are female, and companies have until the end of this year to reach the target.
One argument against such requirements has been a fear that the same women would be tapped over and over to serve on corporate boards, but the study suggests that worry is overblown.
“Concerns that women may be more prone than men to ‘overboarding’ appear to be exaggerated,” the report said. The analysis found that male directors served on an average of 1.8 public companies, while women sat on an average of 2.1 boards. More

Jim Farley, CEO of Club holding Ford Motor (F), was interviewed by “Mad Money” host Jim Cramer for Wednesday evening’s show. The chief executive discussed the automaker’s plans to manage the chip shortage, cost pressures and their initiatives to scale electric-vehicle production. The interview ran after Ford reported a solid quarter after the bell. 1. ‘Scrappy quarter’ Farley described the second quarter as a “scrappy” one as consumer demand outstripped vehicle supply. “The team fought for every chip,” the Ford CEO told Cramer. “We did a great job mitigating all the uncertainty.” The CEO said he was most proud of two things: cost and cash flow. “A lot of our cash from profits is flowing into cash flow. We had to restructure the operations for so many years to get a profitable Ford and now we’re through that.” The company generated revenue of $40.2 billion, which came in solidly above Wall Street expectations, and delivered earnings of 68 cents per share versus the 45-cent consensus. There is one challenge that Farley sees as an opportunity. “We have to deliver profitability on our EVs,” Farley said. What will help Ford bring down the cost of EVs is the upcoming addition of lithium iron phosphate batteries to its EV portfolio , which are cheaper than NCM batteries the company has been using. With the addition of LFP batteries to its lineup, Ford appears to be on track to meet its 600,000 global EV run rate late 2023. 2. Dividend raise despite supply headwinds Another highlight of Ford’s second-quarter was its quarterly dividend hike by 50% to 15 cents per share. The new annualized dividend yield is roughly 4.55%, based on Wednesday’s closing stock price, compared to its previous yield around 3%. Farley said Ford decided to raise the dividend because it is confident in its earning power going forward, even as the company invests heavily in its EV expansion. “The most important part about that decision is that we have plenty of cash to fuel our transformation,” he said. The automaker plans to invest over $50 billion in EVs through 2026 . Farley expressed that Ford has plenty of cash to fund this investment even if there are more headwinds on cost. 3. F-150 Lightning 2-year wait list If you’re in the market for a new Ford, there is a good chance you’ll have to sit on the waitlist. Almost all 2022-model year vehicles sold out including the F-150 Lightning EV as Ford vehicles were “out of control” as it relates to demand, Farley said. “We are totally oversubscribed so it’s our time to scale.” He said there’s about a two year waiting list for a F-150 Lightning. To meet this demand, Ford is scaling F-150 Lightning production from 80,000 to 150,000 units over the next year, Farley said. The automaker is also coming out with a new Mustang, one of Ford’s most celebrated vehicles, along with a new Super Duty truck, which Farley referred to as a “cash-flow king at Ford.” Farley noted that while Ford is putting a lot of energy around its EV initiatives, the automaker isn’t losing sight on its internal combustion engine (ICE) vehicles. “We are leaning into the growth business of going digital with these EV products, but that doesn’t mean we’re going to walk away from our ICE products,” Farley said. 4. Commodity price headwinds The chip shortage isn’t the only obstacle Ford is facing. The company noted in its earnings that it could possibly see roughly $4 billion commodity price headwinds throughout the rest of the year that it could offset with higher car prices and selling a more profitable mix of vehicles. While some commodity prices have eased, including for materials like aluminum, Farley said Ford isn’t breathing easy yet. “We want to be ready for any headwinds that come our way in the next 12 months. Whatever that is. We are seeing commodities ease, but I’ve got to tell you, that doesn’t give me much comfort. We have to execute. That means building product, working with our suppliers, and we’ve got to fix our quality.” (Jim Cramer’s Charitable Trust is long F. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Ford CEO Jim Farley poses next to a model of the all-new Ford F-150 Lightning electric pickup truck at the Ford Rouge Electric Vehicle Center in Dearborn, Michigan, April 26, 2022.
Rebecca Cook | Reuters More

For digital-ad sellers, 2021 was always going to be a hard act to follow. As work, play and shopping shifted online during the covid-19 pandemic, internet advertising boomed. In America spending rose by 38%, to $211bn, compared with average annual growth of 21% in the preceding five years, according to eMarketer, a research firm. Smaller social-media firms such as Pinterest and Snap at times hit triple-digit year-on-year quarterly revenue growth. Even giants such as Alphabet (Google’s parent company) and Meta (Facebook’s and Instagram’s), which receive a third and a fifth of the world’s digital-ad dollars, respectively, clocked rates of 50%. The contrast with 2022 is stark. On July 21st Snap reported that its sales grew by 13%, year on year, in the second quarter, its most anaemic ever. In a letter to investors, the firm confessed that so far this quarter revenue was “approximately flat”. The market was spooked, and the company’s share price fell by almost 40%. The next day Twitter, which also depends on advertising, reported that its revenue had fallen slightly in the three months to June, compared with last year. That triggered concern about the health of online advertising, dragging down the share prices of the industry’s titans. On July 26th Alphabet duly disclosed Snap-like quarterly sales growth of 13%, down from 62% in the same period last year. That was less terrible than expected (its market value rose by 8% on the news) but still pretty bad (it remains a bit below what it had been before the Snap bombshell). A day later Meta said that its revenue declined for the first time, by 1% year on year. Upstart challengers like Snap are the most exposed. When marketing budgets get trimmed, advertisers tend to stick to what they know, says Mark Shmulik of Bernstein, a broker. And they know Google search much better than they do Snap’s experiments with augmented reality. The big firms also boast larger and more diverse sets of customers; Meta serves 10m advertisers globally, compared with Snap’s estimated 1m or less. That insulates them somewhat from softening demand. Somewhat, but not fully. Last year’s covid-boosted baseline is not the only thing weighing on the digital-ad market. Ad-sellers are feeling the delayed effect of Apple’s change last year to the privacy settings on iPhones, which stops advertisers from tracking people’s behaviour on its devices, and thus from measuring the effectiveness of digital ads. Snap cited the Apple policy as a reason for recent weak results. Meta estimates that the change will shave $10bn, or 8%, from its revenue this year. Both Alphabet and Meta are also facing fiercer competition. TikTok, a Chinese-owned short-video platform beloved of Western teenagers, is taking eyeballs from American social media, and ad revenue with them. Perhaps more concerning, previously ad-incurious tech titans are also getting in on the action. In the past couple of years Amazon has built the world’s fourth-biggest online-ad business. Apple has a small but growing ad operation. And Microsoft has just been named as Netflix’s partner in the video-streaming giant’s new ad-supported offering. Another reason for the big ad-sellers’ slowdown is similarly structural. For years they shrugged off blips in the broader economy, as many customers came to see online ads as a virtual shopfront that needed to be maintained even in tough times—often at the expense of other ad spending. That has left ever fewer non-digital ad dollars available to be diverted online. In a pinch, advertisers may now therefore need to take an axe to their digital billboards.The pain isn’t felt equally. Google, whose search ads rely less on the sort of tracking Apple has curbed, may have benefited from Meta’s misery, helping offset some of the slowdown. On July 27th Spotify bucked the trend among challenger platforms, reporting unexpectedly healthy ad revenues from its music-streaming service, which helped buoy its share price by 12%. Even so, the business cycle may be catching up with big tech. ■ More

Sebastian Vettel won four consecutive F1 world titles with Red Bull between 2010 and 2013.
The 35-year-old German will see out the final season of his career with Aston Martin.

The 35-year-old German, who spent six seasons with Ferrari after joining the Italian team in 2015, will see out the remainder of his final campaign with Aston Martin.
Mario Renzi – Formula 1 | Formula 1 | Getty Images

Four-time world champion Sebastian Vettel has announced he will retire from Formula 1 at the end of the 2022 season.
After making his debut in 2007, Vettel went on to win four consecutive world championships for Red Bull between 2010 and 2013, the first of which made him the sport’s youngest title winner.

The 35-year-old German, who spent six seasons with Ferrari after joining the Italian team in 2015, will see out the remainder of his final campaign with Aston Martin.

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Vettel is currently third on the list of all-time Grand Prix winners with 53 victories, trailing only Lewis Hamilton and Michael Schumacher.

“The decision to retire has been a difficult one for me to take, and I have spent a lot of time thinking about it,” said Vettel, who confirmed his retirement in a video posted on Instagram on Thursday.
“At the end of the year I want to take some more time to reflect on what I will focus on next; it is very clear to me that, being a father, I want to spend more time with my family.

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Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V., on Wednesday unveiled a long-anticipated reconciliation package that would invest hundreds of billions of dollars to combat climate change and advance clean energy programs.
The legislation, called the “Inflation Reduction Act of 2022,” provides $369 billion for climate and clean energy provisions, the most aggresive climate investment ever taken by Congress.
The package would curb the country’s carbon emissions by roughly 40% by 2030, according to a summary of the deal.

Senator Joe Manchin (D-WV) exits the U.S. Capitol following a vote, on Capitol Hill in Washington, February 9, 2022.
Tom Brenner | Reuters

Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V., on Wednesday unveiled a long-anticipated reconciliation package that would invest hundreds of billions of dollars to combat climate change and advance clean energy programs.
The 725-page piece of legislation, called the “Inflation Reduction Act of 2022,” provides $369 billion for climate and clean energy provisions, the most aggressive climate investment ever taken by Congress. The bill’s climate provisions (summarized here) would slash the country’s carbon emissions by roughly 40% by 2030, according to a summary of the deal.

The abrupt announcement of the deal came less than two weeks after Manchin, a key centrist who holds the swing vote in the 50-50 Senate, said he wouldn’t support any climate provisions until he had a better understanding of the inflation figures for July.
If passed and signed into law, the act would include funding for the following:
Manufacturing clean energy products, including a $10 billion investment tax credit to manufacturing facilities for things like electric vehicles, wind turbines, and solar panels, and $30 billion for additional production tax credits to accelerate domestic manufacturing of solar panels, wind turbines, batteries and critical minerals processing. It would also include up to $20 billion in loans to build new clean vehicle manufacturing facilities across the U.S., and $2 billion to revamp existing auto plants to make clean vehicles.
Cutting emissions, including $20 billion for the agriculture sector and $3 billion to reduce air pollution at ports. It also includes unspecified funding for a program to reduce methane emissions, which are often produced as a byproduct of oil and gas production, and are more than 80 times as potent as carbon dioxide in warming the atmosphere. In addition, the act allocates $9 billion for the federal government to buy American-made clean technologies, including $3 billion for the U.S. Postal Service to buy zero-emission vehicles.
Research and development, including a $27 billion clean energy technology accelerator to support deployment of technologies that curb emissions and $2 billion for breakthrough energy research in government labs.

Preserving and supporting natural resources, including $5 billion in grants to support healthy forests, forest conservation, and urban tree planting, and $2.6 billion in grants to conserve and restore coastal habitats.
Support for states, including about $30 billion in grant and loan programs for states and electric utilities to advance the clean energy transition.
Environmental justice initiatives, amounting to more than $60 billion to address the unequal effects of pollution on low-income communities and communities of color.
For individuals, a $7,500 tax credit to buy new electric vehicles and a $4,000 credit for buying a new one. Both credits would only be available to lower and middle income consumers.
“I support a plan that will advance a realistic energy and climate policy that lowers prices today and strategically invests in the long game,” Manchin said in a statement on Wednesday. “This legislation ensures that the market will take the lead, rather than aspirational political agendas or unrealistic goals, in the energy transition that has been ongoing in our country.”

More from CNBC Climate:

The Senate is set to vote on the proposed legislation next week, after which it will go to the Democrat-controlled House of Representatives.
President Joe Biden on Wednesday said the tax credits and investments for energy projects in the agreement would create thousands of new jobs and help lower energy costs, and urged the Senate to move on the legislation as soon as possible.
The president has vowed to curb U.S. greenhouse gas emissions by 50% to 52% from 2005 levels by 2030 and reach net-zero emissions by mid-century. With no reconciliation bill, the country is on track to miss that goal, according to a recent analysis by the independent research firm Rhodium Group.
“This is the action the American people have been waiting for,” the president said in a statement on Wednesday. “This addresses the problems of today – high health care costs and overall inflation – as well as investments in our energy security for the future.”  

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Ford Motor (F) reported better-than-expected quarterly results after the closing bell Wednesday, and raised its dividend payout by 50%, helping send shares more than 6% higher in extended-hours trading. Total revenue of $40.2 billion exceeded the consensus estimate on FactSet of $36.87 billion. Adjusted EBIT (earnings before interest and taxes, or operating income) was $3.7 billion, topping estimates of $2.79 billion. That put adjusted EBIT margin (operating margin) at 9.3%, beating estimates of 7.56%. Adjusted earnings per share came in at 68 cents per share, solidly above estimates of 45 cents per share. Cash flow from operating activities was $2.9 billion, while adjusted free cash flow came in at $3.6 billion, helped by the profitability of its automotive operations. Both figures beat expectations and were downright impressive. Bottom line This was a strong quarter for Ford, demonstrating the company’s ability to execute on its near-term, day-to-day business while making strides on its electric-vehicle transformation strategy. Ford’s reaffirmed full-year outlook, despite a challenging macro environment, which also was welcome. “It was a scrappy quarter,” as CEO Jim Farley explained in his interview with Jim on Wednesday’s “Mad Money .” We’re especially pleased to see Ford’s quarterly dividend payout go back to its pre-Covid pandemic level of 15 cents per share from 10 cents, a sign of financial health. Based on Wednesday’s closing price, Ford’s dividend yield will jump to about 4.55% from about 3%. This is a very significant increase that should help raise the stock price’s floor. One reason we’ve been happy to stay invested in the company despite the stock’s struggles this year is its dividend. The fact that Ford pays a growing dividend is a major differentiator from rivals General Motors (GM) and Tesla (TSLA). We’d been more than willing to collect the dividend while fears of a recession turned sentiment against Ford. Investors like us who were patient and kept their focus on Ford’s long-term prospects are being rewarded by this dividend increase. Shares of Ford were popping after hours in reaction to the strong earnings result and dividend hike. We remain big believers in Farley’s strategy of maximizing profits in Ford Blue (the internal-combustion engine or ICE business) while developing an exciting Ford Model e (electric vehicle) future, However, we recognize our price target needs to come down to better reflect market multiples. We are reducing our price target to $18 per share, which represents a more than 35% increase from Wednesday’s $13.19 close. Quarterly results by region North America automotive revenues jumped 94% year over year to $29.1 billion, exceeding estimates of $24.58 billion, according to FactSet. Adjusted EBIT was $3.27 billion, topping estimates of $2.33 billion. EBIT margin came in at 11.3%. Ford said its order bank in the region “remains robust, with nearly all 2022-model year vehicles sold out.” That includes the all-important F-150 Lightning EV, Ford said. Europe revenues grew by 3% year over year to $5.8 billion, missing analyst expectations of $6.38 billion. Adjusted EBIT was $10 million, better than the $66 million loss that was expected. China revenues came in at $400 million, down 20% year over year, as Covid lockdowns during the quarter were a major disruption; analysts had been looking for $474 million in China sales. Adjusted EBIT came in at a loss of $121 million, slightly worse than the FactSet estimate of negative $103 million. EBIT margin was negative 27.6%. Revenues in South America were $700 million, up 29% and better than the estimate of $668 million in sales. The segment reported adjusted EBIT of $104 million, exceeding forecasts of negative $2 million. Ford notched its fourth straight quarter in which its South America was profitable, following a significant restructuring last year. What an incredible turn from this once money-losing operation. International markets group revenue fell 21% year over year to $2 billion, coming in below estimates of $2.420 billion. Adjusted EBIT came in at $60 million, also missing estimates of $142 million. Finally, Ford Credit EBT (earnings before taxes) checked in at $939 million, beating forecasts of $800 million. Outlook Ford maintained its full-year outlook for $11.5 billion to $12.5 billion in adjusted EBIT. At a midpoint of $12 billion, this is still higher than the consensus forecast of $11.347 billion. Additionally, management reiterated its full-year adjusted free cash flow outlook of $5.5 billion to $6.5 billion. Although the headwind from commodity prices was unchanged from last quarter at $4 billion, the company now sees other inflationary pressures costing the company $3 billion this year, up roughly $1 billion from management view last quarter. Ford is working to offset these increases. Ford Credit EBT over the full year is expected to be about $3 billion. Other highlights Ford is still targeting a total company adjusted EBIT margin of 10%; and an 8% EBIT margin from its EVs by 2026. Ford expects to produce 14,000 EVs globally this month and sees a clear path to reach a run rate of 60,000 EVs by the end of next year. Through the second quarter, Ford has sold more than 3,000 E-Transits in the United States. That’s a market share of 95%. Ford ended the quarter with a stake in the EV maker Rivian Automotive valued at $2 billion. In an example of how great the operational turnaround here has been, from 2018 to 2021 Ford’s markets outside North America used about almost $9 billion of free cash flow. This year, those markets are collectively expected to be free cash flow positive. (Jim Cramer’s Charitable Trust is long F. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Ford F-150 Lightning at the 2022 New York Auto Show.
Scott Mlyn | CNBC More

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It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Playtika Holding Corp: “The stock has gone down since we liked it, so we’ve not necessarily been in a great call on it, but it’s very inexpensive.”

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