By Nora Eckert and Nathan Gomes
DETROIT, Feb 10 (Reuters) – Ford Motor’s quarterly core profit fell about 50% to $1 billion as it absorbed higher-than-expected costs from a fire at an aluminum supplier, but CEO Jim Farley predicted strong performance this year as the automaker slashes costs and works to produce globally competitive models.
Ford reported a fourth-quarter net loss of $11.1 billion following substantial, previously disclosed writedowns on its EV programs. Adjusted earnings per share of 13 cents for the quarter missed analyst forecasts of 19 cents per share.
Ford’s shares rose nearly 2% in aftermarket trading.
The company projected earnings before interest and taxes of $8 billion to $10 billion for 2026, within the mean expectation from LSEG analysts of $8.78 billion. Ford projects costs of about $2 billion this year from President Donald Trump’s tariffs, much of that related to sourcing aluminum, especially for its lucrative F-150 trucks.
Trump’s tariffs, as well as a crippling fire at an aluminum supplier, caused its profit to decline last year. Ford narrowly missed its revised guidance of $7 billion, posting earnings before interest and taxes of $6.8 billion for the year.
In late December, the company got updated guidance from the administration that caused it to receive less tariff relief on imported auto parts than anticipated. This change added about $900 million in costs that resulted in Ford’s missed profit guidance for the year, Chief Financial Officer Sherry House said.
The aluminum plant near Oswego, New York that sustained two major fires last year is expected to not be fully operational until between May to September of this year, weighing on Ford’s results more than expected. The automaker posted revenue of $45.9 billion in the fourth quarter, beating analysts’ expectations.
Farley remains focused on speedy development of high-tech models to rival competitors in Detroit and across the globe, such as a $30,000 electric vehicle platform. Next year, Ford will begin rolling out an electric pickup on that platform, a model designed from the ground up by a team based in California.
The EV group was intentionally separated from Ford’s Michigan base in an effort to forge a new design and production process at the century-old automaker, one that rivals the speed of Chinese automakers that bring cars to market in half of the time it takes Ford, Farley has said.
Even more is now riding on the success of the EV pickup. Ford axed many of its earlier electric offerings, writing down several programs in a $19.5 billion hit announced in December, which will be spread across several quarters.
General Motors also said it will record about $7.6 billion in charges related to changes with EV production. Stellantis last week said it faced $26.5 billion in charges across its global lineup.
Ford recorded losses of $4.8 billion in its EV and software unit last year, and projects losses between $4 billion to $4.5 billion in that part of the company this year. The automaker has been working toward profitability on its EV models, a mission that has been complicated by dampened demand following the elimination by the U.S. Congress of a $7,500 consumer tax credit.
Cost reduction remains a priority for Farley. He has forged partnerships with several automakers to share expenses across the globe. Ford and Renault are partnering in Europe to produce EVs, and Reuters reported that Chinese automaker Geely and Ford are in talks for a production and technology partnership.
The Michigan automaker also faces an industry-topping tally of vehicle recalls and hefty warranty costs, which Farley has sought to reduce since he became CEO in 2020.
Ford’s stock has increased about 47% to roughly $14 a share over the past year. Cross-town rival General Motors’ shares have soared about 72% in the same period to around $80 a share, as it consistently posted results that outpaced analyst expectations.
Stellantis stock took a beating last week after its EV writedown, and its price is down about 42% for the last year, to about $7 a share.
(Reporting by Nora Eckert in Detroit; Editing by Mike Colias and David Gregorio)
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