Automobile giant Ford hit a huge bump in its first quarter profits, reporting a sharp fall of 65per cent on Monday. The company also withdrew its forecast for 2025 amid tariff uncertainty as auto sales fell due to the launch of new vehicles.
The company posted $471 million in profits for the quarter, a figure that exceeded analyst expectations but was just a third of its earnings over the same period last year, while revenues fell by five percent to $40.7 billion.
It reported a 7per cent drop in wholesale units, a decline it had flagged earlier, blaming slower production at its Kentucky and Michigan plants where new vehicle launches are underway.
Ford is now estimating a $1.5 billion annual hit to adjusted operating earnings due to tariffs, which have hit a lot of companies and productions since Trump returned to the White House in January. These include levies on imported vehicles, steel, aluminium, and auto parts.
Despite efforts to cushion the blow, including shifting vehicle shipments from Mexico to Canada and avoiding duties on parts that only transit through the US, the company expected the total impact of tariffs to reach $2.5 billion. Supply chain tweaks have helped shave $1 billion off that figure so far.
“Our teams have done a lot to minimize the impact of tariffs on our business,” said chief financial officer Sherry House, as quoted by AFP.
Ford’s “Pro” division, which targets fleet and commercial buyers, and its “Blue” division, covering traditional petrol and diesel models, both saw profits slide. However, losses narrowed in the electric vehicle segment.
Chief executive Jim Farley said Ford was staying “very aggressive” in the market, extending an employee-pricing promotion to drive retail sales. The company reported a lift in April sales thanks to the campaign but warned that prices could start climbing later this year as tariff costs filter through to consumers.
House acknowledged the possibility of a “potential compression” in sales during the second half of 2025. Overall, the carmaker now anticipates full-year sales to remain flat or rise by only around one percent.
The US auto giant described its underlying business “strong,” claiming that it had aligned with the prior projection of falling in the range of $7 to $8.5 billion in adjusted operating earnings, apart from tariff related impacts.
Adding to the challenges are concerns over changes to US emissions policies and restrictions by China on rare earth elements, which are essential for auto manufacturing. Chief operating officer Kumar Galhotra said that such moves could disrupt production for Ford or its competitors, potentially altering pricing strategies across the sector.
Ford shares dropped 2.3per cent in after-hours trading following the announcement.
