Ford Shares Slide After Net Income Plunge, Suspended Guidance

Ford Motor’s first-quarter net income plunged to $471 million from $1.3 billion a year earlier, as EV losses and production halts took a toll, the company said Monday.

Revenue dropped to $40.7 billion from $42.8 billion, and wholesale deliveries fell 7% to 971,000 due to slower output of some models, according to the Wall Street Journal.

The electric-vehicle division lost $800 million, down from $1.3 billion, helped by lower material costs and stronger pricing. Adjusted pretax income fell to $1 billion from $2.8 billion, still beating Ford’s and analysts’ zero-dollar forecast in February.

Ford also suspended full-year guidance, citing uncertainty over President Trump’s tariffs, which it said could cost $1.5 billion. “It’s a pretty dynamic situation. I think this is all really new for all of us,” said CEO Jim Farley. He added the financial impact remains “huge numbers,” though lower than for many rivals.

The WSJ report says to limit losses, Ford paused imports of China-made Lincoln Nautilus and halted U.S. exports to China. CFO Sherry House noted Ford is better insulated than competitors, with 80% of its U.S. sales assembled domestically and most parts untaxed.

Still, Trump’s tariffs derailed Ford’s forecast for lower vehicle prices and steadier demand. The company now expects prices to rise and sales to slow by summer. Carmakers, including GM and Tesla, are reassessing outlooks amid the trade upheaval.

“We are focused on managing what we control,” House said.

We noted after the company’s Q1 report that CEO Farley faces continuing challenges, including overhauling the company’s EV strategy to curb losses and cutting high warranty repair expenses. The automaker lost a record $5.1 billion on EVs last year and expects that deficit to widen to as much as $5.5 billion in 2024.

While Farley is pushing for more affordable, longer-range models, those won’t hit the market until 2027. Meanwhile, the pressure on Ford shares continues, with the stock falling nearly 19% last year, in contrast to General Motors’ 48% surge.

Farley has emphasized the need to close Ford’s $7 billion to $8 billion cost disadvantage against competitors, largely driven by warranty costs. He has tied executive bonuses to improving quality and efficiency, with the company targeting $1 billion in cost cuts this year. 

“In 2025, we expect to make significantly more progress on our two biggest areas of opportunity – quality and cost,” Farley said. “We control those key profit drivers, and I am confident that we are on the right path.”

Looks like the company still has work to do…