Ford (F) reported third quarter earnings that topped estimates and upped the lower end of its profit guidance. The company still sees EV losses piling up by the end of the year.
For the quarter, Ford reported automotive revenue of $46.1 billion vs. $46.2 billion, per Bloomberg consensus, with adjusted EPS of $0.49 vs. $0.41, and adjusted EBIT (earnings before interest and taxes) of $2.66 billion vs. $2.38 billion.
Ford tightened the low end of its full-year adjusted EBIT guidance to between $10.5 billion and $11 billion (from $10 billion to $11 billion seen prior); analysts projected full-year adjusted EBIT of $10.52 billion. Ford’s adjusted free cash flow guidance remained at $6 billion to $7 billion.
Despite this, Ford CFO Sherry House added in a call with reporters that she sees Ford’s full-year 2027 profit “roughly in line” with 2026 results.
12.18 -0.18 (-1.46%)
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Ford stock was slightly higher in early trade on Thursday.
Ford also sees commodity headwinds approaching $2.5 billion year over year (up from $2 billion last quarter) and US industry pricing “about 100 basis points” higher year over year.
“Strong print in light of rising commodity prices with the midpoint of the 2026 EBIT guide raised by $250mn.” Morgan Stanley analyst Andrew Percoco wrote in a note to investors. “That said, the company preliminarily expects EBIT to be flat Y/Y in 2027, which is not all too surprising given GM’s results last week.”
On the flip side, Ford sees $1 billion in material and warranty cost reductions, excluding tariffs and the costs of the Novelis factory fire. Ford CFO Sherry House said the automaker is seeing some increases in steel and copper prices, and expects more price inflation in 2027.
“We are still expecting significant commodity cost increases going into 2027, accompanied by logistics cost increases due to fuel costs rising and also chip prices increasing moderately this year, but more significantly next year and beyond,” House said.
JPMorgan’s Rajat Gupta was impressed, but wants to see more from the automaker.
“Net-net, F’s steady execution, ongoing opportunity in warranty and material cost reductions, and disciplined inventory management supports earnings resilience, although a more meaningful re-rating would require successful execution of the UEV launch and related autonomy capabilities, continued warranty improvements and eventual traction/contribution from Ford Energy commercialization,” he wrote in a note post-earnings.
Ford’s Model e EV business unit posted a Q3 loss of $1.06 billion vs. an estimated $1.17 billion on revenue of $1.2 billion vs. $1.12 billion, down 31% from a year ago, when the federal EV tax expired at quarter-end. In July, Ford said its Model e outlook included about $1 billion in added spending on its Universal EV platform and Ford Energy, mostly in the second half. Ford projects Model e will lose another $4 billion in 2026.
Source: finance.yahoo.com
