TLDR
- Ford reported $1 billion in EBIT for Q1 2025, exceeding breakeven expectations despite revenue dropping 5% to $41 billion
- The company expects a $1.5 billion net hit to operating profit from tariffs in 2025, leading to suspended full-year guidance
- Ford achieved its best first-quarter US pickup sales in over 20 years with Ford Pro maintaining strong market position
- Net income fell to $473 million ($0.12 per share) from $1.33 billion ($0.33 per share) year-over-year
- Ford maintains strong cash position with over $27 billion in cash and $45 billion in liquidity as of March 31
Ford Motor Company reported better-than-expected first-quarter results despite growing tariff pressures, but has withdrawn its full-year guidance due to trade policy uncertainties. The automaker faces challenges balancing strong vehicle demand against rising costs from recent tariff implementations.
Ford delivered $1 billion in earnings before interest and taxes (EBIT) in Q1 2025. This surpassed analyst expectations of roughly breakeven results for the quarter.
Revenue declined 5% to $41 billion compared to the same period last year. The company cited planned downtime at several manufacturing plants as a contributing factor.
Net income fell by approximately two-thirds to $473 million ($0.12 per share) from $1.33 billion ($0.33 per share) in the year-earlier quarter. Despite the decline, these results still topped analyst forecasts.
Tariff Impact Takes Center Stage
The most pressing issue facing Ford is the impact of new tariffs. The company has estimated a gross adverse EBIT impact of $2.5 billion for full-year 2025 due to tariffs.
Through cost-cutting measures and pricing adjustments, Ford expects to offset about $1 billion of this pressure. This still leaves a net negative impact of $1.5 billion.
CFO Sherry House explained that the $2.5 billion gross cost is split between parts and imported vehicles. It also includes impacts from steel and aluminum pricing changes.
The uncertainty around tariffs has led Ford to withdraw its full-year 2025 guidance. The company had previously forecast 2025 earnings before interest and taxes between $7 billion and $8.5 billion.
CEO Jim Farley emphasized Ford’s relative advantage in this environment due to its substantial US manufacturing footprint. “Automakers with the largest US footprint will have a big advantage, and, boy, that is that true for Ford. It puts us in the pole position,” Farley stated during the earnings call.
Strong Performance in Key Areas
Despite these challenges, Ford reported several bright spots in its business performance.
The company achieved its best first-quarter US pickup sales in over 20 years. This indicates continued strong demand for its core vehicles.
Ford Pro continues to be a competitive strength with over 40% share of the US Class 1 truck and van market. The division also reported that 7% of all customer-paid repair orders now come from mobile repair services.
Software subscriptions grew by 20% year over year. This represents progress in Ford’s push toward higher-margin service-based revenue streams.
Ford and Lincoln were the most improved brands in J.D. Power’s 2025 US Vehicle Dependability Study. This highlights Ford’s ongoing quality improvements.
Model e saw US retail sales grow 15% in the quarter. First-quarter wholesale volumes more than doubled for electric vehicles.
Supply Chain Concerns
COO Kumar Galhotra warned about potential supply chain disruptions related to the evolving tariff situation.
“The rare earth materials from China, for example, how they are imported, not just for us, but for the entire industry, has become rather complicated over the last few weeks,” Galhotra noted.
He added that disruption of even a few parts could potentially halt production lines. “It would take only a few parts to potentially cause some disruption into our production.”
This concern echoes across the industry. General Motors recently announced it faces a potential tariff impact as high as $5 billion in 2025.
Ford declared a regular second-quarter dividend of $0.15 per share. The company maintained a strong cash position with over $27 billion in cash and over $45 billion in liquidity as of March 31.
Free cash flow showed a use of $1.5 billion, which Ford attributed to unfavorable timing differences, net spending, and changes in working capital.
Ford Credit reported earnings before taxes up significantly. The division provided a $200 million distribution to the automotive company.
The company reaffirmed it is on track to deliver $1 billion in net cost reductions this year. This figure excludes the impact of changes in tariff policy.
President Donald Trump’s administration recently signed executive orders to relax some of the 25% tariffs on automobiles and auto parts. This move is intended to give automakers more time to transition their manufacturing operations
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
