Ford reports Q2 earnings beat but takes $800M tariff hit Pras SubramanianJuly 30, 2025 at 10:11 PM Ford (F) posted an earnings and revenue beat for the second quarter, reinstating fullyear guidance, but upped its fullyear tariff exposure after seeing $800 million in tariff costs in Q2 alone.
- - Ford reports Q2 earnings beat but takes $800M tariff hit
Pras SubramanianJuly 30, 2025 at 10:11 PM
Ford (F) posted an earnings and revenue beat for the second quarter, reinstating full-year guidance, but upped its full-year tariff exposure after seeing $800 million in tariff costs in Q2 alone.
For the year, Ford said it now expects a "net tariff-related headwind of about $2 billion," which reflects a $3 billion gross adverse adjusted EBIT (earnings before interest and taxes) impact, partially offset by $1 billion of mitigation efforts. Ford CFO Sherry House said on a call with reporters that mitigation efforts could include higher pricing for certain vehicles or using "bonded" rail carriers between Canada and Mexico.
Ford also issued new guidance, with full-year adjusted EBIT seen at $6.5 billion to $7.5 billion, which the company says now takes into account the $2 billion tariff impact. Ford also said it sees full-year adjusted free cash flow in a range of $3.5 billion to $4.5 billion, with capital expenditures of about $9 billion.
Ford shares were volatile in after-hours trading, down over 4% immediately following the news.
Prior to withdrawing guidance in February, the company had seen full-year adjusted EBIT guidance $7.0 billion to $8.5 billion.
For the quarter, Ford reported revenue of $50.2 billion vs $44.14 billion estimated per Bloomberg consensus, up 5% compared to a year ago. Ford posted adjusted earnings per share (EPS) of $0.37 vs. $0.33 expected, on adjusted EBIT (earnings before interest and taxes) of $2.1 billion vs $1.91 billion estimated.
Ford said its adjusted EBIT was impacted by $800 million in net tariff exposure in Q2. Last week, Big Three rival GM (GM) reported that profit dipped in Q2 as tariffs added $1.1 billion to costs. And Dodge parent Stellantis (STLA) said on Tuesday that tariffs ate away nearly $350 million in profit in Q2, with the full-year tally expected at $1.73 billion.
The impact of tariffs, as well as rising warranty costs for recalls that have plagued Ford vehicles, weighed on results. For example, Ford booked a $570 million charge in Q2 related to the recall of 700,000 SUVs due to fire risk.
As part of its Ford+ plan, Ford divided its business into three units: Ford Blue for the traditional gas-powered business, Ford Model e for the electric vehicle division, and Ford Pro for its commercial and super duty truck business. Ford reported the following in Q2:
Ford Blue: $25.8 billion in revenue, $661 million in EBIT
Model e: $2.4 billion in revenue, -$1.329 billion in EBIT
Ford Pro: $18.8 billion in revenue, $2.318 billion in EBIT
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Ford Motor Co. displays its 2025 Ford Maverick truck before media day of the Detroit Auto Show at Huntington Place in Detroit, Michigan, U.S. January 9, 2025. REUTERS/Rebecca Cook (REUTERS / Reuters)
Look for Farley to weigh in on trade deals the Trump team struck with the UK and EU on the earnings call; Farley has said deals like those are unfair given the fact that vehicles imported from Canada and Mexico, which use a high percentage of US-made parts, are tariffed at a much higher 25%.
Despite tariffs, Ford saw sales gains in Q2 as the company's "employee pricing for all" strategy was a huge sales mover. Ford posted Q2 US sales of 612,095 units, a 14% jump compared to a year ago and well ahead of the 1.7% estimated industry sales growth rate.
Hybrid (+23%) sales for vehicles like the Maverick, and gas-powered vehicle sales (+15%) like the Bronco SUV drove the sales gains, while EV sales lagged (-31%).
Speaking of EVs, commentary from executives on the outlook for business given the loss of consumer EV tax credits will be another item on the agenda. CEO Jim Farley said the company would hold an event on August 11th where the company will reveal plans to "design and build breakthrough electric vehicles in America."
Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram.
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