ii view: Ford powers annual profit prediction higher

Second-quarter results to 30 June

• Revenue down 3.8% to $48.3 billion (£36.3 billion)
• Adjusted profit (EBIT) up 19% to $2.5 billion
• Adjusted earnings up 14% to 42 US cents per share
• Quarterly dividend of 15 cents per share, unchanged from previous quarter

Guidance:

Now expects adjusted annual profit (EBIT) of $10-11 billion, up from a previous $8.5-10.5 billion

Chief executive Jim Farley said:

“We delivered another strong quarter and raised our full-year guidance, but the more important story is the growing evidence that Ford is becoming a more profitable, more disciplined and genuinely different company.”

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ii round-up:

Automaker Ford Motor Co (NYSE:F) upped full-year profit hopes as pricing power for hybrids, off-roaders and trucks helped second-quarter earnings beat Wall Street estimates.

The Michigan headquartered company now expects full-year adjusted profit (EBIT) of $10-11 billion, up from a previous $8.5-10.5 billion.

Shares in the S&P 500 company rose 5% in post results US trading having come into these latest numbers up by 14% so far in 2026. That’s ahead of a near 9% gain for the S&P itself. Fellow automakers such as Tesla Inc (NASDAQ:TSLA), Volkswagen AG (XETRA:VOW) and Aston Martin Lagonda Global Holdings  Ordinary Shares (LSE:AML) are all down by double digit percentages year-to-date.  

Ford operates across the three core divisions of Ford Blue, offering combustible engines and hybrid vehicles, Ford Pro making commercial vehicles and Ford e providing all electric vehicles.

Annual profit hopes for the Blue and Pro divisions were raised by $0.5 billion each to potential outcomes of $5.5 billion and $7.5 billion respectively.

The annual loss for Ford e is now expected to be around $4 billion, down from a previous $4.5 billion.

A halving of sales at Ford e during the quarter left second-quarter revenues down 3.8% at $48.3 billion. An ongoing focus on costs and a 4% reduction year-over-year aided a 14% rise in adjusted earnings during the period to 42 US cents per share. Analysts had forecast 35 cents per share.

Accompanying management comments highlighted Ford Energy as a fresh source of growth. The group’s energy business generates close to 20 gigawatts (GWh) with possibilities to expand to 40 GWh, and data centre operators are rumoured as potential customers.

A declared third-quarter dividend of 15 US cents per share is unchanged from the current quarter.  

ii view:

Started in 1903, Ford’s home US market remains by far its biggest at just under two-thirds of sales last year. Other important markets were Canada, the UK and Mexico. Combustion engine sales up 5.5% year-over-year to 1,891,939 accounted for most sales in 2025. Hybrid vehicles sales rose 21.7% to 228,072, while electric vehicle (EV) sales fell 14% to 84,113.

For investors, although potentially reduced, annual losses for the e or EV business continue to be forecast. Trump trade tariffs have previously impacted business. A forecast price/earnings (PE) ratio above the three-year average may suggest the shares are not obviously cheap, while Chinese competitors such as BYD are now firmly targeting established Ford markets.

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To the upside, Ford achieved a market share gain of 0.6% to 13.2% in the group’s key US market during 2025. An adjusted profit margin of 6.5% in the first half of this year is up from 3.1% in H1 2025, underlining progress in improving profitability. A diversity of both product and geographical regions exists, while a move into the energy sector could offer growth in future.

For now, and while many risks remain, growth opportunities and a forecast dividend yield of around 4% will likely see at least income investors buckle up for the ride.

Positives

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

Negatives

• Uncertain economic outlook
• Previous staff industrial action

The average rating of stock market analysts:

Strong hold