US Markets
Ford Raises Full-Year Core Profit Outlook Following Surprise Second-Quarter Earnings Growth
Ford Motor (F) shares rose early Wednesday after the automaker lifted its full-year core profit outlook, while the company reported an unexpected year-over-year increase in its second-quarter earnings and recorded revenue above market estimates.Adjusted earnings before interest and taxes are now anticipated to come in between $10 billion and $11 billion for 2026, up from the company's previous projections of $8.5 billion to $10.5 billion, it said late Tuesday. During a conference call with analysts, Chief Financial Officer Sherry House said the revised guidance is driven by "strong pricing and mix," according to a FactSet transcript.The auto manufacturer forecasts US industry pricing to be up about 0.5% this year. The stock gained 4.7% in the most recent premarket activity.Ford's adjusted earnings came in at $0.42 a share for the June quarter, up from $0.37 the year before, defying the consensus on FactSet for a decline to $0.36. Revenue decreased 4% to nearly $48.3 billion, but topped the Street's view for $47.24 billion."Our second-quarter results demonstrate our resiliency and intentional actions to drive profitability," House said. "Revenue was impacted due to expected volume reductions stemming from lower Novelis aluminum supply and the sunsetting of certain vehicles as we refresh our portfolio."Revenue ticked up 1% in the company's Ford Blue division, but fell 5% in the Ford Pro segment. Sales tanked 56% in the electric vehicle business. Overall wholesale production slipped 12% to 1.04 million units.Ford incurred a $3.6 billion non-cash charge in the second quarter related to the disposition of the company's BlueOval SK battery joint venture, as well as $500 million of charges associated with the automaker's previously announced plans in December to scale back some of its EV operations.Earlier this month, Ford said its second-quarter new US vehicle sales declined 10% year over year to 549,200 vehicles.Last week, rival General Motors (GM) raised its full-year earnings outlook after logging a surprise annual gain in its second-quarter revenue. Electric vehicle giant Tesla (TSLA) reported an unexpected decline in its second-quarter earnings.Ford expects adjusted free cash flow of $6 billion to $7 billion for the ongoing year, compared with the prior guidance of $5 billion to $6 billion."Our guidance does not include potential impacts of a significant escalation in the Middle East or a material downturn in the US economy, which could have a substantial impact on industry demand," House said on the call.The Trump administration recently declined to extend the US-Mexico-Canada Agreement in its current form. The trade pact remains in force, but will now undergo annual reviews as Washington seeks changes to North American trade rules.Earlier this month, RBC Capital Markets said in a note that the US decision not to extend the USMCA could weigh on automakers like Ford and General Motors. However, the brokerage said a bilateral trade agreement between the US and Mexico could still be reached by late 2026 or early 2027.
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