Commodity cost headwinds intensify to US$2.5 billion, Ford Motor Company (F.US) Q3 core profit still edges up 4% against the trend, raises lower end of full-year guidance

Ford Motor Company (F.US) released its third-quarter 2026 financial results after the U.S. market close on October 28 (early morning Beijing time on October 29). Quarterly revenue was US$49.5 billion, down 2% year over year; adjusted earnings per share were US$0.49, up 9% year over year and above the market consensus of US$0.40. Net profit was US$2 billion, down 17% year over year. The core profitability metric edged up against the trend: adjusted EBIT was US$2.7 billion, up 4% year over year, with an adjusted EBIT margin of 5.4%, up 0.3 percentage points year over year; however, automotive segment revenue for the quarter was US$46.08 billion, slightly below the expected US$46.24 billion. Operating cash flow for the quarter was US$5.4 billion, adjusted free cash flow was US$4.7 billion, and the company ended the period with US$25.3 billion in cash and US$46.4 billion in liquidity. By segment, the combustion vehicle business Ford Blue posted adjusted EBIT of US$1.39 billion, down 10% year over year; the commercial vehicle business Ford Pro posted US$1.67 billion, down 16% year over year, weighed down by launch costs for the Canadian Super Duty and rising commodity prices; the electric vehicle business Model e lost US$1.06 billion, a marked narrowing from the US$1.41 billion loss in the same period last year, with revenue down 31% year over year to US$1.2 billion. The company expects the full-year Model e loss to land at the low end of its previous guidance of US$4 billionUS$4.5 billion. CEO Jim Farley told analysts that the F-150 is turning over at a far faster pace than usual, with the company targeting inventory of 5560 days of supply, below the industry's customary 80100 days. "That has let us build a disciplined full-size truck business while watching competitors play a very different game." Cost control and strong demand for pickups and SUVs are helping Ford withstand pressure from inflation and the Iran war. The company raised the lower end of its full-year adjusted EBIT guidance to US$10.5 billionUS$11 billion from US$10 billion, and raised its full-year commodity cost headwind estimate to nearly US$2.5 billion from about US$2 billion, with pressure coming from higher copper and steel prices, diesel prices pushing up freight costs, and rising chip prices. Adjusted free cash flow guidance was maintained at US$6 billionUS$7 billion. The company also declared a fourth-quarter dividend of 15 cents per share. CFO Sherry House said 2027 profit is expected to be roughly flat with 2026, and the company expects commodity costs to remain significantly higher entering 2027, fuel price increases to push up logistics costs, and the memory chip shortage triggered by the AI boom to cause chip prices to "rise modestly this year and by a more significant margin next year and beyond."