Ford Motor Company faced fresh turbulence this week, as tariff pressures and supply chain challenges forced the automaker to suspend its 2025 financial guidance. Despite beating Wall Street’s earnings expectations for the first quarter, Ford stock fell nearly 2.6% in premarket trading on Tuesday, adding to a broader 19% decline over the past year.
Ford suspends 2025 guidance amid tariff concerns
During its first-quarter earnings call, Ford executives revealed that they would no longer provide financial targets for the full year, citing “substantial industry risks.” Chief among them are the 25% tariffs on imported vehicles and auto parts, recently implemented under President Donald Trump’s administration.
“We’re in the trenches taking action to minimize the impact of tariffs on our business,” said Chief Operating Officer Kumar Galhotra.
Ford expects a $2.5 billion tariff impact this year but aims to offset $1 billion through cost reductions and logistical adjustments. This leaves an anticipated $1.5 billion hit to 2025 earnings before interest and taxes (EBIT).
Key first-quarter highlights
Despite these challenges, Ford’s Q1 2025 results showed resilience:
- Adjusted EPS: 14 cents (vs. 2 cents expected)
- Total revenue: $40.7 billion (5% decline year over year)
- Automotive revenue: $37.42 billion (beat expectations)
The automaker reported $471 million in net income, down 64% compared to the first quarter of 2024. Adjusted EBIT fell to $1.02 billion, compared to $2.76 billion a year earlier.
Ford’s various segments showed mixed performance:
- Ford Blue (traditional vehicles) posted a 3% revenue decline but a staggering 90% drop in EBIT to $96 million.
- Ford Pro (commercial fleet business) saw revenues fall 16% to $15.2 billion.
- Model e (electric vehicles) narrowed losses from $1.33 billion to $849 million year-over-year.
- Ford Credit (financing arm) delivered strong results, with a 12% revenue jump to $3.24 billion.
Ford’s strategy to manage tariffs
Ford has implemented several key changes to soften the tariff blow:
- Bonded carriers now transport vehicles and parts through the U.S. to avoid import duties.
- The company halted exports to China but continues using Chinese facilities for Southeast Asia markets.
- Ford is investing in localized supply chains to reduce dependency on imports.
Without the tariff impact, Ford was on track for $7 billion to $8.5 billion in adjusted EBIT for 2025, adjusted free cash flow between $3.5 billion and $4.5 billion, and capital expenditures around $8 billion to $9 billion.
However, CFO Sherry House warned that tariffs could lift U.S. vehicle prices by 1% to 1.5% later this year, despite government assurances that car costs would remain stable.
How Ford compares to rivals
While tariffs pose a significant challenge, Ford’s domestic production advantage may cushion the blow better than competitors:
- Ford produces 80% of vehicles sold to U.S. customers at American assembly plants.
- General Motors, by contrast, warned that tariffs could cost it up to $5 billion in 2025.
- Stellantis has also withdrawn its financial guidance, citing similar supply chain and tariff risks.
Financial position remains stable
Ford ended the quarter with $20.9 billion in cash and cash equivalents. Its adjusted free cash flow stood at negative $1.5 billion, partly reflecting strategic investments and ongoing restructuring efforts.
Long-term debt (excluding Ford Credit) totaled $16.64 billion as of March 31, 2025.
Outlook for Ford stock
Ford plans to update investors on its 2025 outlook during its second-quarter earnings release. Analysts are watching closely to see whether tariff mitigation efforts and restructuring can stabilize the business.
While Ford’s turnaround plan, known as Ford+, is delivering cost savings and quality improvements, the volatile global trade environment remains a major headwind.
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