Unexpected tariffs bill dealt a heavy blow to fourth-quarter performance, Ford Motor Company (F.US) expects profits to hit rock bottom and bounce back strongly in 2026.

Ford Motor Company (F.US) reported its first lower-than-expected quarterly profit since 2024. The financial report showed that BAIC Foton Motor's fourth-quarter revenue fell by 5% year-on-year to $45.9 billion, with adjusted earnings per share of $0.13, below the market's average expectation of $0.18. Ford Motor Company expects a significant increase in profits in 2026 after bearing an unexpected tariff bill at the end of last year. The fourth-quarter adjusted earnings before interest and taxes (EBIT) were $1 billion. Chief Financial Officer Sheryl House stated on Tuesday that an unexpected change in tariff terms caused Ford to lose approximately $900 million in savings from last year's expectations. The Trump administration notified Ford about this on December 23, effectively doubling Ford's tariff expenditure to $2 billion. House said, "We received notice from the Trump administration very late in the year of an unexpected change in how automakers can reduce their tariff expenses," "Due to the late communication, we learned that we would not be able to realize the associated $900 million in savings." Despite dealing with ongoing volatility from tariffs, losses in the electric vehicle business, and consequences from a supplier's fire last year (which resulted in Ford losing $2 billion worth of F-series pickup production), the company still expects profits to rise. The company forecasts adjusted EBIT to reach $8 to $10 billion in 2026, higher than $6.8 billion in 2025. The mid-point of Ford's outlook is slightly above the aggregated analyst average expectation of $8.86 billion. House stated that if it weren't for the tariff bill in late December, Ford's adjusted EBIT last year should have been $7.7 billion. Ford anticipates adjusted earnings of $8 to $10 billion this year. House noted that Ford anticipates another $2 billion reduction in profits due to tariffs this year. This is because the company needs to pay import taxes for foreign-made aluminum needed for its best-selling F-series pickups to offset supply disruptions from last year's fire at Novelis' factory in New York. The disruption will continue to impact Ford in the first half of this year, House pointed out. She noted that the fire-affected Novelis factory isn't expected to fully resume production until this summer. The automaker also plans to increase its capital spending to a maximum of $10.5 billion this year, higher than less than $9 billion in 2025. House stated that the company is investing an additional $1 billion to establish a new business selling energy storage batteries to utility companies and data centers. Investors are expecting a rebound in profits as Ford plans to produce more high-profit SUVs and pickups. Previously, actions led by the Republican party canceled cash fines for not meeting fuel economy and emissions regulations, saving Ford billions. This regulatory leniency essentially allows automakers to produce and sell as many high-profit, low-mileage SUVs and pickups as they can. "We are seeing improvement in profitability," CEO Jim Farley told the media during the Detroit Auto Show in January, "I've been CEO for five years, and I'm very excited about this year." Market sentiment towards Ford has also improved as the company seems to have finally made progress in cutting long-standing high costs. Farley noted that these high costs put Ford at an $8 billion competitive disadvantage annually. House stated that Ford cut costs by $1.5 billion last year, exceeding the company's target by 50%. "The stock is in good shape," said Morningstar analyst David Whiston in an interview before Ford's performance announcement, "It looks like they've made a lot of progress in turning around the cost side of things." Ford Blue is the company's traditional business, including internal combustion models and hybrid vehicles. The department's fourth-quarter EBIT was $727 million, about half of the previous year. Ford's U.S. vehicle deliveries during this period increased by 2.7%. Ford's global wholesale sales declined by about 2% last year, dropping to around 4.4 million units; while Ford saw growth in the U.S. market, it lost ground in Europe, particularly in China. Ford Pro, the company's robust commercial vehicle and logistics services division, reported an EBIT of $1.23 billion, also down from the previous year. Ford's electric vehicle division Model e reported a loss of $1.22 billion, better than the nearly $1.4 billion loss from the previous year. Overall, Ford's electric vehicle business lost $4.8 billion last year, compared to $5.1 billion in 2024.