Ford Earnings: 2025 Guidance Not as Optimistic as GM's, but Matching GM's Tone May Not Have Mattered

Ford Motor Company (NYSE: F) reported its fourth-quarter and full-year 2024 earnings on Wednesday, February 6, 2025, after the market closed. The Detroit-based automaker's earnings call was held at 5:00 p.m. ET, with a replay available for one week following the call. Ford's earnings release and presentation can be accessed on the company's Investor Relations website.

Ford's management team discussed the company's financial results and provided earnings guidance for 2025 during the call. The company's Ford+ growth plan focuses on enhancing customer experiences through its three business segments: Ford Blue (gas-powered and hybrid vehicles), Ford Model e (electric vehicles and digital experiences), and Ford Pro (commercial vehicles and services). Ford employs around 174,000 people globally and offers financial services through Ford Motor Credit Company.

Ford's fourth-quarter and full-year 2024 earnings results were mixed, with adjusted earnings per share (EPS) of 33 cents and revenue of $43.02 billion, respectively. These results marked a 0.5% decline in automotive revenue compared to the same period a year earlier and a 13.8% increase in adjusted EPS. Ford's 2024 fourth quarter included $43.2 billion in automotive revenue, a net loss of $526 million, or 13 cents per share, and adjusted earnings before interest and taxes (EBIT) of $1.05 billion, or 29 cents per share.

Ford's 2025 guidance was less optimistic than analysts' expectations, with the company forecasting adjusted pretax income of $7 billion to $8.5 billion, compared to analysts' average estimate of $10.2 billion for 2024. Several factors contributed to Ford's less optimistic outlook compared to GM, including market headwinds, persistent warranty expenses, lagging cost-cutting efforts, and tariff concerns.

Ford's Model e electric vehicle segment faces specific challenges that impact the company's overall financial projections. These challenges include intense competition, high costs for next-generation vehicle development, and a widening gap between warranty provisions and cash flows. In the third quarter of 2024, Ford's Model e segment saw a staggering 33% revenue drop, with wholesale volumes falling 11%. The company incurred a loss before interest and taxes of $1.22 billion for the segment, which is expected to widen to $5 billion this year. Additionally, warranty expenses linked to quality issues have added pressure, with the company anticipating up to 18 months before these costs are substantially reduced. Inflation, particularly affecting the joint venture in Turkey and material costs for the Transit van in Europe, will likely further strain margins.

Ford's cost-cutting strategy and investment in future products balance with the need to maintain market competitiveness and innovation in the EV sector. The company is focusing on reducing costs while continuing to invest in research and development for electric vehicles (EVs) and related technologies. Ford has announced net cost improvements of $1.4 billion for its Model e EV segment, despite increasing spending on new battery plants and EV launches. This balance allows Ford to control expenses while ensuring it remains competitive in the rapidly evolving EV market.

Ford's CEO, Jim Farley, has expressed concerns about the potential impact of tariffs on the company's operations. In early January, Farley called for a more "comprehensive" tariff policy, arguing that other automakers are benefiting from a "bonanza" while Ford faces potential tariffs on Canadian and Mexican imports starting in March. Ford's cost-cutting strategy and investment in future products balance with the need to maintain market competitiveness and innovation in the EV sector through a combination of measures, including reducing costs, enhancing customer experiences, and investing in research and development for new EV technologies and products.

In conclusion, Ford's 2025 guidance was less optimistic than analysts' expectations, with the company forecasting adjusted pretax income of $7 billion to $8.5 billion. Several factors contributed to Ford's less optimistic outlook compared to GM, including market headwinds, persistent warranty expenses, lagging cost-cutting efforts, and tariff concerns. Ford's Model e electric vehicle segment faces specific challenges that impact the company's overall financial projections, but the company's cost-cutting strategy and investment in future products balance with the need to maintain market competitiveness and innovation in the EV sector. Ford's CEO, Jim Farley, has expressed concerns about the potential impact of tariffs on the company's operations, and the company is taking steps to address these challenges and maintain its competitive edge in the rapidly evolving EV market.