Ford Motor Q3 Earnings Call Highlights

Key Points

• Ford reported solid third-quarter results, with adjusted EBIT of $2.7 billion, up 3% year over year, despite revenue declining 2% to $49.5 billion. The company raised the low end of its 2026 adjusted EBIT outlook to $10.5 billion while maintaining its free-cash-flow and capital-spending forecasts.
• Truck, van and utility demand, along with software and parts growth, supported performance, while Ford continues targeting $1 billion in material and warranty-cost reductions in 2026. Ford Pro and Ford Credit remained significant contributors, although commodity costs and temporary launch expenses pressured earnings.
• Model e narrowed its loss by 25%, and Ford said its sub-$30,000 Fathom EV remains on track to launch in late 2027. The company expects Model e to reach breakeven by 2029 and is targeting 2027 profit roughly in line with 2026 despite about $2 billion in anticipated cost headwinds.

Ford Motor NYSE: F reported third-quarter adjusted EBIT of $2.7 billion and raised the low end of its full-year profit outlook, citing strong truck and utility-vehicle demand, growth in software and parts, and continued cost-reduction efforts.

The company now expects 2026 adjusted EBIT of $10.5 billion to $11 billion, compared with its previous range that had a lower bottom end. Ford maintained its outlook for adjusted free cash flow of $6 billion to $7 billion and capital expenditures of $9.5 billion to $10.5 billion. The company also declared a fourth-quarter regular dividend of $0.15 per share.

Third-quarter revenue totaled $49.5 billion, down 2% year over year, while adjusted EBIT increased 3%. Chief Financial Officer Sherry House said revenue was affected by product discontinuations, including the Escape and Corsair, as Ford prepares Louisville Assembly Plant for production of the upcoming Fathom electric vehicle. Ford generated $4.7 billion in adjusted free cash flow during the quarter and ended the period with $25.3 billion in cash and $46.4 billion of total liquidity.

Truck mix and cost actions support results

President and CEO Jim Farley said Ford continued to benefit from its concentration in trucks, vans and utilities. He said F-Series captured the highest retail share among full-size truck brands during the quarter and remains on pace to be America’s best-selling truck for a 50th consecutive year. Maverick remained the best-selling hybrid pickup in the U.S., while Transit continued as the country’s top-selling van, according to Farley.

Ford said its higher-margin off-road and performance products represented about one-quarter of U.S. sales in the third quarter, up nearly four percentage points from a year earlier. House said Ford maintained disciplined incentive spending on F-Series, which contributed to high revenue share and low incentive expense in the quarter.

Ford Blue reported revenue of $27.1 billion and EBIT of $1.4 billion, declines of 3% and 10%, respectively. The company attributed the decrease primarily to lower volume from discontinued products, the impact of the Middle East conflict in the region and higher commodity costs. Ford Pro generated $17.8 billion in revenue, up 2%, and $1.7 billion in EBIT, down 16%, as higher commodity costs and temporary Oakville launch costs outweighed favorable mix and lower tariffs.

Ford said it is working toward $1 billion in material and warranty-cost reductions during 2026, excluding Novelis and tariffs. House said warranty and material costs were lower both in the third quarter and year to date. The company expects commodity headwinds of nearly $2.5 billion for the full year, about $500 million above its prior assumption.

The company said operational recovery from the Novelis disruption is largely complete. Ford incurred approximately $1 billion in temporary Novelis-related costs year to date, with additional costs expected in the fourth quarter, but continues to project a net $1 billion benefit in 2026.

Model e losses narrow as Ford prepares Fathom launch

Ford’s Model e unit reported revenue of $1.2 billion and an EBIT loss of $1.1 billion. The loss improved 25% from a year earlier. Ford reiterated that it expects Model e to improve its first-generation EV EBIT performance by about 40% in 2026 and remains targeted to reach breakeven by 2029.

Farley said Ford’s first vehicle based on its Universal Electric Vehicle, or UEV, platform, called Fathom, remains on track to launch in the fourth quarter of next year. The company expects the vehicle to start below $30,000, while Andrew Frick, president of Ford Blue and Model e, said the starting MSRP will be $28,350 and the range will extend into the high-$30,000 range.

Chief Operating Officer Kumar Galhotra said 90% of Fathom validation testing has been completed and Ford has built its first production-line vehicles at Louisville Assembly Plant. He said the principal remaining launch risk is supplier readiness, including suppliers’ ability to produce high-quality parts at production rates.

Ford said it expects higher Model e expenses in 2027 as it invests in UEV, Ford Energy and European partnership products. House said the next significant improvement in Model e profitability is expected in the first half of 2028, as UEV and Ford Energy production generate revenue.

Software, parts and energy expansion

Ford said its software services and parts businesses achieved record quarterly revenue and accounted for approximately 10% of total revenue at strong margins. BlueCruise, connectivity services and Ford Pro Intelligence were among the largest software-services growth contributors, while U.S. wholesale parts sales and European expansion supported parts growth.

Ford Credit reported earnings before taxes of $803 million, up $172 million from a year earlier. House attributed the increase to derivatives performance, healthy financing margins and supportive used-vehicle pricing. Ford Credit and Ford Pro also launched Ford Pro Leasing during the quarter, adding commercial leasing to the company’s fleet-management offerings.

Farley said Ford Energy is preparing to bring 20 gigawatt-hours of annual battery-storage capacity online by the end of next year. Contracts and late-stage negotiations account for more than 80% of Ford Energy’s 2028 capacity, he said, and Ford expects that capacity to be fully committed by the first quarter of next year. Ford Energy President Dave Carroll said the company is focused on launching the initial 20 GWh and is evaluating expansion scenarios, but has no new capacity announcement.

Ford targets stable 2027 profit amid higher costs

Looking ahead, Farley said Ford is targeting 2027 profitability roughly in line with 2026, despite expected year-over-year headwinds of about $2 billion from commodities, memory and logistics. The company plans to offset those pressures through industrial-system improvements, revenue optimization, software and parts growth, and efficiency actions.

Ford expects to refresh 70% of its global vehicle portfolio by volume next year, with much of the investment concentrated in North America. Planned downtime for the next-generation F-150 will affect production, though Ford expects added Super Duty capacity at Oakville to largely offset that impact.

The company reiterated its longer-term objective of reaching an 8% adjusted EBIT margin by 2029.

About Ford Motor (NYSE:F)

Ford Motor Co is an American automobile manufacturer founded in 1903 by Henry Ford and headquartered in Dearborn, Michigan. The company helped popularize mass automobile production and is known for brands including Ford and Lincoln.

Ford develops, manufactures and sells cars, trucks, sport utility vehicles, commercial vehicles and electric vehicles. Its product portfolio includes the F-Series pickup trucks, Transit commercial vans, Mustang sports cars and a range of utility vehicles. The company also provides vehicle software, connected services, fleet solutions, maintenance and other support services.

Ford operates through Ford Blue, which focuses on gasoline- and hybrid-powered vehicles; Model e, which develops electric vehicles and related technologies; and Ford Pro, which serves commercial and fleet customers.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.