Ford Motor 2025 Q2 Earnings Misses Targets with Net Income Plunging 101.6%

Ford Motor Company (F) reported its fiscal 2025 Q2 earnings on Jul 30th, 2025. The automaker surpassed revenue expectations with a reported $50.2 billion, a 5% increase from the previous year. However, Ford swung to a GAAP net loss of $36 million due to special charges, including a field service action and the cancellation of an electric vehicle program. The company reinstated full-year guidance but lowered its EBIT forecast due to increased tariff impacts. Despite these challenges, Ford declared a third-quarter dividend of 15 cents per share, reflecting confidence in cash generation.

Revenue

Ford Motor's revenue for the second quarter of 2025 reached $50.18 billion, marking a 5.0% increase year-over-year. The company excluding Ford Credit contributed $46.94 billion, while Ford Credit added $3.24 billion, collectively driving total revenues to $50.18 billion.

Earnings/Net Income

Ford Motor reported an earnings per share loss of $0.01 in 2025 Q2, a sharp decline from a profit of $0.46 per share in 2024 Q2. The company also disclosed a net loss of $29 million, a significant downturn from the $1.83 billion net income achieved in the same quarter last year. The earnings performance was notably poor due to special charges impacting net income.

Price Action

The stock price of Ford Motor edged down 2.29% during the latest trading day, fell 4.48% over the past trading week, and increased 0.65% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Ford Motor shares following revenue growth on financial report release dates and holding them for 30 days has yielded moderate returns over the past three years. The strategy achieved a compound annual growth rate (CAGR) of 13.12%, trailing the benchmark by 3.10 percentage points. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.34, this approach suggests a low-risk investment with stable returns. While the strategy demonstrated consistent performance, it still lagged behind more aggressive benchmarks. Investors may need to weigh the benefits of stability against the potential for higher returns in other sectors.

CEO Commentary

James Duncan Farley, President, CEO & Director, highlighted Ford's solid second quarter performance with record revenue of $50 billion, driven by effective collaboration among teams, dealers, and suppliers. He noted a significant $2.1 billion in adjusted EBIT and a year-over-year improvement in costs, excluding tariff impacts. Farley emphasized Ford Pro as a growth engine, diversifying revenue streams, and targeting high-margin recurring revenues. He expressed optimism regarding the forthcoming electric vehicle platform, citing it as a "Model T moment" for Ford, while also addressing the need for a balanced approach to emissions and tariffs, ultimately aiming for enhanced profitability.

Guidance

Ford expects adjusted EBIT for the full year to be between $6.5 billion and $7.5 billion, with adjusted free cash flow projected at $3.5 billion to $4.5 billion and capital expenditures around $9 billion. The guidance reflects a net tariff headwind of approximately $2 billion, coupled with a projected U.S. industry sales figure of 16 million to 16.5 million units and a target for net cost improvement of $1 billion, excluding tariff effects.

Additional News

Ford Motor Company has announced several key updates in recent weeks. Alicia Boler Davis has been named President of Ford Pro, aiming to strengthen the company's commercial vehicle segment. Ford also declared a third-quarter regular dividend of 15 cents per share, payable on Sept. 2 to shareholders of record at the close of business on Aug. 11. Furthermore, Ford is collaborating with PSEG Long Island and ChargeScape to enroll Ford and BMW electric vehicles in a grid reliability program, marking a strategic move toward enhancing sustainability and energy efficiency in its EV offerings.