Ford Stocks Dip Despite Q4 Beat, Muted 2025 Guidance Raises Concerns

Ford Motor Company (NYSE: F) reported its fourth-quarter and full-year 2024 earnings on Wednesday, February 6, 2025, beating top and bottom line forecasts. However, the automaker's stock price fell over 5% in post-market trading following the report, primarily due to muted guidance for 2025 and potential tariff impacts. Here's a closer look at Ford's earnings and the factors influencing its stock price.



Ford's Q4 2024 earnings preview
Ford sold a record over 97,000 electric vehicles (EVs) in the US last year, making it the number two seller of EVs in the country. However, it was topped by cross-town rival GM as the number two seller of EVs in the US. Ford is expected to report total company revenue of around $43 billion, down from $44 billion a year ago and $46.2 billion in the third quarter. The company is forecasted to post an adjusted EPS of around $0.33.

Ford Q4 2024 earnings results
Ford beat Q4 expectations, posting $48.2 billion in revenue, up $2.2 billion year-over-year (YOY). The company generated $185 billion in revenue for the entire year, its highest ever. Ford reported an adjusted EBIT of $2.1 billion in the quarter, up 103% from Q4 2023. Ford's Blue and Pro units generated $1.6 billion, while its Model e unit lost another $1.4 billion.



Ford's EV strategy and potential policy changes
Ford's EV strategy aligns with the global market trends by focusing on affordable, high-volume electric vehicles (EVs). The company aims to make EVs accessible to a broader range of customers, which is in line with the increasing demand for affordable and sustainable transportation options worldwide. Ford's commitment to affordable EV platforms and commercial EV customers reflects the growing interest in electric vehicles among businesses and consumers alike.

Regarding the potential impacts of policy changes under the Trump administration on Ford's EV business, CEO James Farley expressed confidence in the company's EV strategy, stating that even if CO2 regulations change, the market for EVs remains vibrant. This suggests that Ford is prepared to adapt to potential policy shifts and continue its focus on affordable and profitable EV platforms. However, it is essential to monitor the evolving regulatory landscape and its potential effects on Ford's EV business.

Cost-saving initiatives for 2025
Ford has planned several key cost-saving initiatives for 2025, focusing on improving efficiency across all business areas. According to Sherry House, Vice President of Finance, the company has a detailed plan with 90% of the cost savings pipeline identified, which will be implemented throughout the year, leading to back-end loaded savings. The primary areas of focus for cost savings include material costs and warranty. Ford is confident in achieving these cost-saving targets, as they have a detailed plan in place and have identified the majority of the cost savings pipeline.

Addressing potential tariff impacts
Ford CEO Jim Farley acknowledged the potential impact of tariffs on the company's operations, stating that if they persist, it would require significant strategic shifts. In the short term, Ford is well-positioned with stock adjustments and manufacturing changes to mitigate the effects. However, if tariffs continue, Farley mentioned that building new plants could be a necessary long-term strategy. He emphasized the need for a comprehensive tariff policy that applies to all import competitors, as currently, some automakers like Hyundai-Kia and Toyota are importing vehicles into the U.S. with no incremental tariffs. This, according to Farley, creates an unfair advantage for these companies.

In conclusion, Ford's Q4 2024 earnings report showed strong results, with the company beating top and bottom line forecasts. However, the muted guidance for 2025 and potential tariff impacts raised concerns among investors, leading to a decline in Ford's stock price. Ford's EV strategy aligns with global market trends, and the company is confident in its cost-saving initiatives for 2025. However, investors should monitor the evolving regulatory landscape and potential tariff impacts on Ford's operations. As an investor, it is essential to stay informed about the company's strategic initiatives and the broader market trends to make well-informed decisions.