Ford recently reported its fourth-quarter earnings, surpassing Wall Street’s expectations on both revenue and profit. However, the company’s outlook for 2025 painted a more cautious picture, sending its stock downward in after-hours trading. CEO Jim Farley emphasized Ford’s commitment to improving vehicle quality and cost efficiency while acknowledging ongoing market challenges.
With a record-breaking annual revenue of $185 billion and significant earnings growth, Ford’s financial performance was impressive. However, projected headwinds—including supply chain concerns, shifting EV dynamics, and geopolitical trade tensions—cast uncertainty over the company’s future. In this blog, we break down Ford’s financial results, upcoming challenges, and what investors should watch for in the coming year.
Ford’s Financial Outlook: Beating Expectations
Despite a turbulent year, Ford wrapped up 2024 with solid fourth-quarter earnings. Let’s take a closer look at the numbers:
- Earnings per share (EPS): 39 cents (above the expected 33 cents)
- Automotive revenue: $44.9 billion (surpassing the forecasted $43.02 billion)
- Total company revenue: A record-breaking $185 billion for the year
- Net income: $5.9 billion, translating to $1.46 per share
- Adjusted free cash flow: $6.7 billion
The company’s traditional gas-powered vehicle segment (Ford Blue) and its commercial fleet division (Ford Pro) were key drivers of profitability. However, challenges in Ford’s electric vehicle (EV) business weighed heavily on overall results.
The EV Dilemma: Losses Continue Despite Growth
Ford’s shift toward electric vehicles has been anything but smooth. While the company saw a 20% increase in U.S. EV and hybrid sales in January 2025, its EV division, Ford Model E, reported a staggering $5.08 billion loss for 2024.
- Q4 EV losses: $1.39 billion
- Full-year EV losses: $5.08 billion
The company has struggled with high production costs, slowing consumer demand, and aggressive competition from Tesla and Chinese automakers like XPeng. Ford’s approach to scaling EV production remains cautious, as the industry faces uncertainties surrounding government incentives, infrastructure readiness, and raw material availability.
Ford’s guidance for 2025 was a major reason behind its stock decline. The company expects adjusted EBIT of $7 billion to $8.5 billion, lower than analysts’ estimates of $9.3 billion. Several factors are contributing to this cautious outlook:
- Declining Vehicle Prices – The automotive industry is facing a 2% price decline, impacting profit margins.
- Material and Warranty Cost Reductions – Ford aims to cut costs by $1 billion this year, following $1.4 billion in reductions in 2024. However, unexpected warranty and recall expenses have offset these gains.
- Trade Tensions and Tariffs – Ford and other automakers are navigating uncertain trade policies, particularly concerning U.S.-China tariffs and potential policy shifts under a new administration.
- Weaker First Half of 2025 – The company expects a slow start to the year, with Q1 EBIT projected to be near breakeven. This is partly due to major plant overhauls in Kentucky and Michigan, which could disrupt production.
Stock Market Reaction: A Sharp Decline
Following the earnings announcement, Ford’s stock fell by 5% in after-hours trading. The decline reflects investor concerns over the company’s ability to navigate economic and industry-specific challenges.
Additionally, Ford’s stock performance has been underwhelming over the past year:
- 2024 decline: Nearly 20%, largely due to unexpected warranty costs
- Stock struggles: Shares haven’t traded above the 200-day moving average since mid-2024
- Current risk: Ford shares could hit a four-year low if downward trends persist
Meanwhile, rival General Motors (GM) posted a stronger-than-expected Q4 report, with 2025 guidance that exceeded analysts’ expectations. GM’s ability to outperform Ford in earnings and projections put additional pressure on the automaker to execute its turnaround strategy effectively.
Final Thoughts: Can Ford Overcome These Challenges?
Ford’s latest earnings report highlights strong financial performance but also underscores the uncertainty that lies ahead. The company is taking proactive steps to improve quality, reduce costs, and balance its EV ambitions. However, macroeconomic factors—such as trade tensions, tariffs, and shifting market demand—will play a crucial role in shaping its success.
For investors, Ford remains a high-risk, high-reward stock. While its legacy business remains profitable, EV losses and market volatility continue to pose challenges. If Ford successfully executes its cost-cutting strategies and improves vehicle reliability, it could regain investor confidence. However, competition, economic pressures, and shifting consumer preferences will ultimately determine Ford’s trajectory in 2025 and beyond.
Will Ford’s cautious strategy pay off, or will it struggle to keep pace with industry changes? Only time will tell.