Ford Motor Company suspended its annual forecast on Monday, citing uncertainty stemming from President Trump’s tariffs, which are expected to impact around $1.5 billion in adjusted revenues before interest and taxes.
Earlier this year, the automaker from Dearborn, Michigan, predicted its revenues without considering the implications of customs duties. Ford’s CFO, Shelley House, mentioned that while they’re generally on track to meet expectations, tariffs are a significant concern.
House emphasized their focus on what they can control amid these uncertainties.
Unlike rivals like General Motors, Ford executives have opted to halt their outlook until there’s more clarity regarding the effects of retaliatory tariffs and consumer reactions to potential price hikes.
In the first quarter, Ford reported earnings per share of 14 cents, compared to estimates of 2 cents, but down from 49 cents a year ago. Management noted that improvements in costs and quality helped exceed expectations.
The company had previously indicated that production issues related to product launches would impact first-quarter results. Net income saw a significant drop, falling from $1.3 billion last year to $471 million.
Overall, Ford’s revenue decreased by 5% to $40.7 billion, which was still above the anticipated $36 billion. The revenue boost came as consumers rushed to purchase vehicles, especially as tariffs caused price increases. Ford was among the few automakers to offer incentives to capture market share during this surge.
Ford also mentioned that tariffs are adding roughly $2.5 billion in annual costs, particularly impacting imports from Mexico and China. While automakers have largely ceased exporting cars to China, imports of certain models, like the Lincoln Nautilus, continue.
House noted that Ford could potentially save about $1 billion through various strategies, including utilizing bond carriers from Mexico to transport vehicles to Canada, where US tariffs do not apply.
Estimates suggest that a 25% tariff on automobile imports could add over $100 billion in costs for US automakers this year. Recently, the president approved a deferral on taxes related to auto parts, offering auto companies a credit of up to 15% on domestically assembled vehicles.
This month, GM revised its profit forecasts due to tariffs, anticipating up to $5 billion in costs.
An analyst memo from Barclays indicated a preference for Ford over GM, highlighting that a larger percentage of Ford’s US sales are domestically assembled—79% compared to GM’s 53%.
Stellantis, the maker of Jeep, has also suspended its guidance amidst tariff uncertainties.
In addition to challenges from trade policies, Ford is grappling with significant losses in the electric vehicle sector, projecting up to $5.5 billion in losses this year alone, adding to over $10 billion in losses since 2023.
Moreover, Reuters reported that Ford has scaled back its ambitious plans to develop a next-generation electrical architecture for a vehicle known as the FNV4, encountering delays and high installation costs.
Ford Pro, which is the company’s profitable commercial vehicle segment, recorded first-quarter revenue of $15.2 billion, marking a 16% decline from the previous year. Meanwhile, Ford’s petrol engine division reported quarterly revenue of $21 billion, and the Model E division, which includes software and EV initiatives, posted $1.2 billion in revenue over three months.
