Ford Motor Q1 Earnings Call Highlights

Key Points

• Ford reported Q1 revenue of $43.3 billion and $3.5 billion adjusted EBIT and raised full-year adjusted EBIT guidance to $8.5–$10.5 billion, though the quarter included a $1.3 billion one-time IEEPA tariff benefit (ex-IEEPA adjusted EBIT ~$2.2 billion).
• Segment results were mixed: Ford Pro delivered $1.7 billion EBIT and Ford Blue $1.9 billion (Ford Blue guidance up $500M to $4.5–$5.0 billion), while Model e lost $777 million with full-year losses still guided to $4.0–$4.5 billion, even as paid software subscriptions rose to 879,000 (+30% YoY).
• Ford expects the Novelis hot mill to restart in May and foresees a $1 billion YoY EBIT improvement (H2-weighted) but will incur $1.5–$2 billion one-time alternative-aluminum costs; commodity headwinds are now just above $2 billion, while full-year financial targets remain adjusted FCF $5–6 billion, CapEx $9.5–$10.5 billion, and cash/liquidity of $22 billion and >$43 billion, respectively.

Ford Motor NYSE: F reported first-quarter 2026 results that included $43.3 billion in revenue and $3.5 billion in adjusted EBIT, prompting the company to raise its full-year adjusted EBIT outlook as it highlighted progress on services, software, and a reorganization aimed at accelerating product and technology execution.

Quarterly results and raised full-year EBIT guidance

President and CEO Jim Farley said Ford’s first-quarter performance reflected “sharp execution and the momentum we’re building for our Ford+ plan,” citing $43.3 billion in revenue and $3.5 billion in adjusted EBIT. Based on the quarter, Ford raised its full-year 2026 adjusted EBIT guidance to a range of $8.5 billion to $10.5 billion.

Chief Financial Officer Sherry House noted that first-quarter results included a $1.3 billion one-time benefit related to IEEPA tariffs. House said the adjustment “largely benefits Ford Blue and Ford Pro at about $700 million and $500 million, respectively,” and relates to IEEPA tariffs paid between March 2025 and February 2026.

Excluding the IEEPA impact, House said adjusted EBIT would have been $2.2 billion. She attributed the quarter’s strength versus original guidance to “a change in calendarization of cost improvements and timing of investments, growth in software and physical services, and higher net pricing.”

Mix, volume, incentives, and inventory

House said global revenue increased more than 6% despite an expected nearly 4% volume decline, which she linked to exiting “low-margin products like Escape in North America and Focus in Europe.” In the U.S., she said Ford posted its “highest Q1 share of revenue in five years,” led by large utilities and trucks.

On inventory, House said Ford expects to remain within its target of 55–65 retail days’ supply for the year, noting that F-Series sales remained healthy as inventory recovered from the Novelis disruption. She also emphasized incentive discipline, saying the company was spending less on incentives than competitors on average. Specifically, she said the F-150 had “the highest retail share, highest average transaction price, and the lowest incentive spend per unit versus our key competition” for the quarter.

Segment performance: Pro and Blue profits offset by Model e losses

Ford Pro posted $1.7 billion in EBIT, which House said came “against the backdrop of Novelis-related production disruptions.” She highlighted growth in recurring revenue and said paid software subscriptions rose to 879,000, up 30% year over year. House also pointed to features such as Ford Pro AI aimed at helping fleet managers identify maintenance needs and optimize operations.

Ford Blue delivered $1.9 billion in EBIT, supported by F-Series performance and go-to-market discipline. Andrew Frick, President of Ford Blue and Model e, said improved mix helped results, pointing to Explorer and Expedition, alongside the phase-out and sell-down of Escape. He also said off-road trims were an intentional part of the strategy, with off-road performance trims reaching 25% of U.S. volume, supported by offerings such as Tremor and Raptor. Frick said the mix is “relatively more profitable,” aligning with Ford’s “profit pillars.” Farley added: “No boring products.”

Ford Model e reported an EBIT loss of $777 million. House said the segment is beginning to benefit from portfolio changes announced in December and that Ford saw “a nearly 35% improvement in our Gen1 losses.” She added that Ford expects the first quarter to be the strongest quarter for Model e in 2026, as the company increases investment tied to the UEV platform and Ford Energy ahead of 2027 launches.

Ford Credit delivered EBT of $783 million, up $200 million, with House citing improvements in financing margin, a “high-quality book of business,” and favorable derivatives performance.

Novelis recovery, commodity headwinds, and tariff items

House said Ford’s Novelis recovery is “progressing as expected,” and the company still expects a $1 billion year-over-year improvement in EBIT, weighted to the second half. That outlook is net of $1.5 billion to $2 billion of one-time incremental costs to secure alternatively sourced aluminum until the Novelis facility reaches full throughput later in the year.

On timing, Chief Operating Officer Kumar Galhotra told analysts the company still expects the Novelis hot mill to restart in May, with both restart and ramp enablers “on track.” He said Ford has contingency plans, including additional aluminum supply, if the ramp encounters issues. Farley added that Ford tracks the situation “every day” by grade and process step and has learned how to back up supply.

For 2026, House said Ford now expects commodity headwinds “just above $2 billion,” about $1 billion higher than the prior estimate, “largely due to higher aluminum pricing driven by global supply constraints.” She said the estimate is driven by Ford’s steel and aluminum exposure and is separate from Novelis-related aluminum costs, which the company “package[s]…separately.”

In response to questions on hedging, House said the guidance assumes commodity prices “stay where they are,” noting the forward curves are up. She described a mix of fixed-cost contracts, multi-year contracts, and index-based contracts with “a quarter lagging,” as well as natural hedges. If commodity prices decline, she said that would be a “net positive.”

House also reiterated that the impact of ongoing tariffs is unchanged at about $1 billion and is now part of run-rate costs, excluding the one-time IEEPA benefit and Novelis temporary costs.

Cash flow, capital allocation, and 2026 outlook details

Adjusted free cash flow was a use of $1.9 billion in Q1. House attributed the outflow to typical seasonality from Q4 to Q1, including working capital dynamics, as well as higher net spending tied to investments, bonus payments, and other timing items. She said working capital and timing differences are expected to be favorable on a full-year basis.

Ford reaffirmed full-year guidance for:

• Adjusted free cash flow: $5 billion to $6 billion
• CapEx: $9.5 billion to $10.5 billion, including $1.5 billion for Ford Energy
• Assumed U.S. SAR: 16.0 million to 16.5 million units with flat industry pricing

House said Ford’s balance sheet included $22 billion in cash and more than $43 billion in liquidity, and that the company remains committed to its investment-grade rating. She said Ford repaid its convertible debt without refinancing and completed an anti-dilutive share repurchase program during the quarter, and renewed its $18 billion corporate credit facilities for another year.

Ford also declared a second-quarter regular dividend of $0.15 per share, payable June 1 to shareholders of record May 12, according to House.

For segments, Ford maintained its outlook for Ford Pro adjusted EBIT of $6.5 billion to $7.5 billion, Ford Model e losses of $4.0 billion to $4.5 billion, and Ford Credit EBT of about $2.5 billion. Ford raised Ford Blue’s guidance by $500 million to $4.5 billion to $5.0 billion, which House said reflects a stronger underlying business.

In Q&A, House addressed the earnings cadence for the remainder of the year, pointing to the non-repeat of the IEEPA benefit, commodity pressure later in the year, and higher investments tied to launches including the UEV platform, battery electric stationary storage (BESS), and Oakville. She said results should be “fairly consistent” across Q2 through Q4.

Farley also discussed Ford’s longer-term services opportunity, saying software and physical services revenue was over $15 billion last year and is expected to grow “nearly 8% annually through the end of the decade.” He described key drivers including aftermarket parts growth, expanded parts offerings (including multi-make parts), remote service—saying “almost 20% of all Ford’s repair now is done outside the dealership”—and growth in areas such as ADAS and Pro Intelligence, which he said are growing “about 30%-40% a quarter with very high margins.”

About Ford Motor NYSE: F

Ford Motor Company NYSE: F is an American multinational automaker headquartered in Dearborn, Michigan. Founded by Henry Ford in 1903, the company became an early pioneer of mass-production techniques with the Model T and the adoption of the moving assembly line. Today, Ford designs, manufactures, markets and services a broad range of vehicles and mobility solutions under the Ford and Lincoln brands, spanning passenger cars, SUVs, pickup trucks and commercial vehicles.

Ford's business activities extend beyond vehicle production to include parts and aftermarket services, fleet and commercial sales, and automotive financing through Ford Motor Credit Company.

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