Key Takeaways:
Ford reported Q2 adjusted EPS of $0.42, beating consensus by 21 percent, and raised its full-year EBIT guidance to $10-$11 billion.
"Off-road vehicles now account for a quarter of U.S. sales, and our product mix is driving margin expansion," CEO Jim Farley said on the earnings call.
Revenue came in at $48.3 billion, a 3.8 percent year-on-year decline and a 2.6 percent miss versus the $49.6 billion consensus, as temporary aluminum supply disruptions and portfolio refresh timing weighed on volumes, which fell 12.3 percent. Adjusted operating income reached $2.50 billion, a 19.4 percent beat, on a 5.2 percent margin. CFO Sherry House cited reduced warranty and material costs as supporting margins.
Ford Blue, the combustion and hybrid unit, now expects full-year EBIT of $5-$5.5 billion, up from $4.5-$5 billion. Explorer and Expedition retail sales rose more than 20 percent, while F-Series demand remains firm with disciplined incentives and a lean 45-day retail supply, President Andrew Frick said.
Ford Pro, the commercial unit, raised its EBIT outlook to $7-$7.5 billion from $6.5-$7.5 billion. Paid Ford Pro Intelligence subscriptions exceeded 900,000, and Oakville is scheduled to add up to 100,000 units of Super Duty capacity from the fourth quarter of 2026.
Model e, the EV unit, narrowed its second-quarter EBIT loss to $919 million from $1.33 billion a year earlier, the third consecutive quarter of year-on-year improvement. Management expects Gen-1 EV EBIT to improve about 40 percent in 2026 and forecasts a full-year loss of roughly $4 billion.
Ford Energy, a new unit applying battery manufacturing and monitoring to energy storage, expects to reach 20 gigawatt-hours of annual capacity by late 2027 and is producing prototype cells in Michigan. Farley said Ford is "in the third inning" of contracting for 2028 capacity, with strong demand from utilities.
Ford ended the quarter with $22.3 billion in cash and $43.4 billion in liquidity, and has returned more than $16 billion through dividends and repurchases over five years. The dividend yield exceeds 4 percent.
Shares traded at $14.48, down from $14.96 before the release, though the stock is up 12.5 percent year to date, outpacing General Motors' roughly 8 percent gain while Tesla fell 28 percent. Ford trades at a forward sales multiple of 0.32, below GM.
The guidance raise signals management expects the mix shift and cost reductions to keep lifting margins. Investors will watch the pace of hybrid and Universal Electric Vehicle platform launches, with first deliveries of the roughly $30,000 models expected in 2027.
This article is for informational purposes only and does not constitute investment advice.
