Ford reported its first-quarter earnings, exceeding Wall Street’s revenue and EPS expectations. However, due to the uncertainty surrounding Trump’s auto tariffs, Ford has decided to suspend its full-year guidance. Let’s delve into a detailed breakdown of Ford’s Q1 2025 earnings.
After General Motors reduced its full-year financial guidance last week, investors are now eagerly anticipating Ford’s next move. Previously, Ford’s 2025 forecast included an EBIT of $7 billion to $8.5 billion and capital expenditures between $8 billion and $9 billion.
The looming threat of Trump’s new auto tariffs, which entail a 25% duty on imported vehicles and components, has put Ford on edge. Despite Ford producing a higher percentage of vehicles in the US compared to other major automakers, the impact of these tariffs is still a cause for concern.
Ford’s CEO, Jim Farley, remains optimistic, referring to the tariffs as “an opportunity for Ford.” He highlighted the company’s distinct footprint and exposure to tariffs during a recent interview with CNN. Ford imports approximately 21% of the vehicles it sells in the US, whereas GM imports around 46%.
Wall Street analysts anticipate Ford to post a Q1 EPS of $0.0 on revenue of $38.02 billion. The company’s earnings are segmented into three business units: Ford Blue (gas-powered vehicles), Model e (electric vehicles), and Ford Pro (commercial and software business).
In the previous quarter, Ford’s EV unit (Model e) incurred a loss of $1.4 billion, while Pro and Blue each reported an adjusted EBIT of $1.6 billion.
Ford’s first-quarter revenue stood at $40.7 billion, surpassing expectations, with an adjusted EPS of 0.49. The company reported an adjusted EBIT of $1 billion, a 63% decrease from Q1 2024. The added tariff costs, primarily impacting Ford Blue and Ford Pro, resulted in a nearly $200 million hit to Ford’s first-quarter EBIT.
Model e reported an EBIT loss of $849 million, while Ford Pro generated an EBIT of $1.3 billion and Ford Blue $96 million. Despite the significant loss in Model e, there was a $500 million improvement compared to Q1 2024.
Ford’s focus on enhancing gross margins and investing in battery facilities and next-generation products has shown promise. The company attributed higher Model e revenue to the launch of new EVs in Europe, such as the electric Explorer and Capri.
Ford’s “Power Promise” promotion, offering a free home charger and other benefits, has been instrumental in driving demand in the US. However, due to the uncertainty surrounding tariffs, Ford has decided to suspend its full-year guidance.
The company estimates the gross cost of tariffs for the full year to be around $2.5 billion, with an expected adverse adjusted EBIT impact of approximately $1.5 billion. Ford’s “From America, For America” campaign, featuring employee pricing on most 2024 and 2025 models, has been extended through July 4.
Stay tuned for more updates from Ford’s first-quarter conference call and annual meeting on Thursday, May 8, where the company’s EV plans and strategies to navigate the new tariffs will likely be unveiled.
