ii view: Ford breaks records but warns on Q4

Third-quarter results to 30 September

• Revenue up 9% to $50.5 billion
• Adjusted profit (EBIT) flat at $2.6 billion
• Adjusted earnings down 8% to 45 US cents per share 
• Quarterly dividend of 15 cents per share, unchanged from previous quarter

Guidance:

• Now expects adjusted full-year profit of between $6 billion and $6.5 billion, down from a previous $7-8.5 billion

Chief executive Jim Farley said:

“Ford posted another strong quarter, delivering more than $50 billion in revenue powered by our incredible products and services, the durability of Ford Pro and our disciplined focus on cost and quality.”

“We are heading into 2026 as a stronger and more agile company. We will continue to focus on execution and on quickly making the right strategic calls on propulsion, partnerships and technology that will create tremendous value for our customers.”

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ii round-up:

A seventh straight month of US sales growth helped Ford Motor Co (NYSE:F) report record revenues, although with a fire at aluminium supplier Novelis now expected to reduce fourth-quarter production. 

US sales growing twice as fast as the industry pushed third-quarter sales to late September, up 9% to $50.5 billion. A fifth consecutive quarter of year-over-year cost reductions helped the vehicle maker battle US trade tariffs to leave quarterly adjusted profit (EBIT) flat versus a year ago at $2.6 billion. The Michigan headquartered company now expects full-year adjusted profit of between $6 billion and $6.5 billion, down from a previous range of $7 billion to £8.5 billion.

Shares in the S&P 500 company swung between low single digit losses and gains in post results US trading having come into these latest figures up by almost a quarter so far in 2025. The S&P 500 index is up 14% during that time. Electric vehicle (EV) maker Tesla Inc (NASDAQ:TSLA) has gained by just over a tenth year-to-date. 

Ford operates across the three core divisions of Ford Pro providing commercial vehicles, Ford Blue, offering combustible and hybrid vehicles, and Ford e making all electric vehicles. The group has been pursuing a series of performance improvement initiatives including cost cuts under its Ford Plus transition plan.

As well as attempting to source aluminium supplies from elsewhere, Ford is working to up production of its bestselling F-Series pick-up truck early in 2026 in order to help counter reduced final quarter 2025 supply.

The F-Series remains on track for a 49th consecutive year as the USA’s best-selling truck. The Ford Pro division generated a one tenth increase in adjusted profits during this latest quarter. 

Profits for Ford Blue retreated 6%, with losses for the Ford e increasing marginally. Management flagged strong customer demand across all segments. 

Group cash held of $33 billion underpinned a previously announced fourth quarter dividend payment of $0.15 per share, unchanged from Q3.  

ii view:

Started in 1903, Ford today competes against players such as General Motors Co (NYSE:GM), Volkswagen AG (XETRA:VOW), Mercedes-Benz Group AG (XETRA:MBG) and even EV pick-up truck maker Rivian Automotive Inc Class A (NASDAQ:RIVN). Employing around 170,000 people, combustible and hybrid vehicles under Ford Blue made most revenues in 2024 at 64%. That was followed by commercial vehicles at 29%, Ford finance or credit at 5% and all electric vehicles under the ‘e’ division at 2%.%. Geographically, the US remained its biggest market last year at just over two-thirds of sales, with Canada, the UK and Mexico other important countries.    

For investors, problems for aluminium supplier Novelis are now expected to hinder production and reduce full-year profits. Newly imposed US trade tariffs cost the company $700 million during this latest quarter. The e division remains loss making while a forecast price/earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap. 

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More favourably, demand, particularly in its home US market, remains robust. A fifth consecutive quarter of year-over-year cost reductions comes under the group’s ongoing performance improvement plan. A diversity of both product and geographical regions exists, while cash held of $33 billion suggests a robust balance sheet. 

For now, and despite headwinds not of its own making, ongoing management performance initiatives and a forecast dividend yield in the region of 5% are likely to keep investors onboard for the ride.

Positives

• Action to restructure the business taken
• Attractive dividend yield (not guaranteed)

Negatives

• Trade tariff headwind
• Previous staff industrial action

The average rating of stock market analysts:

Hold