Ford Earnings: 2025 Guidance Not as Optimistic as GM’s

Key Morningstar Metrics for Ford Motor

• Fair Value Estimate: $19.00
• Morningstar Rating: ★★★★★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: High

What We Thought of Ford Motor’s Earnings

Ford Motor F finished 2024 with fourth-quarter adjusted diluted earnings per share of $0.39, up 34.5% year over year, beating the $0.33 LSEG consensus. However, the stock fell 4.5% during Feb. 5 after-hours trading, which we attribute to the company’s 2025 guidance being well below consensus. We maintain our fair value estimate of $19 per share, but will reassess all inputs once we roll our model forward for the 10-K. There was good news for shareholders with the company declaring a supplemental dividend of $0.15 per share payable ($596.1 million) on March 3 to shareholders on record at Feb. 18.

2025 guidance calls for the Pro and Blue segments’ EBIT to fall from 2024 levels while the Model e electric vehicle segment’s loss remains close to 2024’s $5.1 billion. Model e will have about $1 billion in incremental 2025 costs versus 2024 due to about $500 million for engineering and another about $500 million for a battery joint venture. Model e won’t see new vehicles such as a new EV pickup until 2027, so we expect its losses to remain high well into that year. Total company adjusted EBIT guidance is $7.0 billion-$8.5 billion, which at its midpoint is down 24% from 2024’s $10.2 billion.

Guidance assumes no impact from any EV tax credit changes or tariffs instituted by President Donald Trump. It also assumes US auto sales of 16 million-16.5 million, which we see as reasonable. Profit cadence will be about two-thirds coming in the second half of 2025. The first quarter is expected to be about breakeven, due to the nonrepeat of replenishing dealer inventory in the first quarter of 2024, lower pricing, and continued foreign exchange headwinds from Argentina, Brazil, and Turkey. Management also guides for a $1 billion net cost reduction thanks to lower warranty costs (an ongoing problem for Ford) and vehicle design improvements coming later in 2025. US industry pricing is guided for a 2% fall from 2024, but Ford sees its decline below 2%, thanks to fresh pickups and the new Expedition and Navigator coming this year.