- Tariff impact of $1.5 billion
- Guidance suspended
- Guidance to restart from Q2
Ford Motor Company (F:NYSE) pulled its forward guidance and warned of a net $1.5 billion hit to adjusted EBIT (earnings before interest and taxes) in 2025, sending the shares 2%% lower in after-hours trading on Monday (5 May).
For context, the Detroit-based automaker had previously projected 2025 adjusted EBIT of between $7 billion and $8.5 billion in February. The firm said it will resume guidance in the second quarter when it hopes to have a better idea of the tariff impact, consumer reaction and competitive response.
Ford CEO Jim Farley said: ‘It's still too early to fully understand our competitors' responses to these tariffs. It's clear, however, that in this new environment, automakers with the largest U.S. footprint will have a big advantage.’
The company said it can reduce gross tariff costs by around $1 billion through actions such as transporting vehicles from Mexico to Canada using bond carriers and stopping US exports to China.
INDUSTRY SUPPLY CHAIN WOES
The automotive industry is grappling with 25% tariffs on imported vehicles and auto parts not compliant with the US-Mexico-Canada agreement. Analysts estimate tariffs on automotive imports could add more than $100 billion to costs this year.
Last week, Ford’s rival General Motors (GM:NYSE) lowered guidance amid a $4 billion to $5 billion tariff impact. Jeep maker Stellantis (STLA:NYSE) has also suspended guidance due to uncertainties around tariffs.
Ford’s first quarter revenue fell 5% to $40.7 billion, beating Wall Street expectations of $36 billion, while EPS (earnings per share) came in at $0.14 compared with Street estimates of $0.02.
Chief financial officer Sherry House said: ‘Our results in the first quarter show that the Ford+ [turnaround] plan is working. We are transforming this company into a higher growth, higher margin, more capital efficient and more durable business.’
Cash flow from operations was $3.7 billion, and adjusted free cash flow was negative $1.5 billion. The company had $27 billion cash in hand and $45 billion in liquidity at the end of March.
