#Ford Reports Fourth-Quarter Results
Ford Motor Company reported fourth-quarter 2025 results ending December 31, 2025, with adjusted EBIT of $6.8 billion for the full year, including a $2 billion headwind from Novelis aluminum supplier fires and a $2 billion net tariff impact. Excluding these one-time factors, full-year EBIT would have reached $7.7 billion. The company delivered revenue of $187 billion (up 9% YoY), achieved 42% total shareholder return, and grew U.S. market share to 13.2%—the best performance in six years. Ford guided 2026 adjusted EBIT of $8 billion to $10 billion and free cash flow of $5 billion to $6 billion, signaling confidence in underlying business momentum despite record Model e losses of $4.8 billion.
#Financial Performance Breakdown
Ford Pro delivered $6.8 billion EBIT with double-digit margins, driven by record Super Duty sales (up 10% to best levels in over 20 years) and Transit sales (up 6%). Software and physical services revenue grew 10% and now contributes 19% of Ford Pro's EBIT, approaching the 20% target. Paid software subscriptions surged 30% to over 800,000 users. The commercial vehicle segment maintained its dominance with over 42% Class 1-7 market share in the U.S. (roughly equal to the two largest competitors combined) and the number one position in Europe for the 11th consecutive year.
Ford Blue generated $3 billion EBIT as warranty cost reductions and software/services growth offset production losses from Novelis and adverse exchange impacts. Revenue remained roughly flat despite a 5% wholesale decline, reflecting strong net pricing and product mix. Hybrid truck sales surged 60%, Bronco achieved record sales, Explorer led the three-row SUV segment, and the Raptor performance franchise set records with off-road trims comprising over 20% of U.S. sales mix—a massive earnings power driver.
Ford Model e losses improved to $4.8 billion from higher prior-year levels, reflecting cost reductions and higher volumes in Europe (where margins are stronger) partially offset by increased Gen 2 platform investments. Revenue and volume grew 73% and 69% respectively, driven by European product introductions. In December 2025, Ford rationalized its U.S. EV portfolio, pivoting to a multi-energy platform strategy that will significantly improve run-rate economics going forward.
Ford Credit delivered EBT of $2.6 billion (up 55% YoY) with distributions of $1.7 billion, driven by improved financing margins. U.S. retail and lease FICO scores exceeded 750, maintaining a high-quality book. The recent industrial bank application approval will expand capabilities and lower funding costs over time.
Cost performance exceeded expectations with $1.5 billion in year-over-year improvements (versus $1 billion target) across material and warranty costs, contributing to better-than-expected Q4 results despite tariff headwinds.
#Market Reaction
Ford stock rose approximately 2.1% to $13.85 on February 11, 2026, following the earnings release, as investors emphasized management's 2026 profit outlook and strategic EV pivot over the company's massive quarterly loss. The positive reception contrasted sharply with pre-earnings anxiety, where elevated options activity and increased put-to-call ratios signaled traders bracing for volatility.
Trading volume surged to 125.4 million shares—113% above the three-month average—as the market digested what one analyst called "the worst quarterly earnings miss in four years." Ford reported a staggering $11.1 billion GAAP quarterly loss, marking the largest loss since 2008, driven by $7 billion in EV-related writedowns (including the expected disposition of the BOSK investment) and tariff costs.
However, Wall Street looked past the headline loss to focus on operational fundamentals: Ford's 2026 adjusted EBIT guidance of $8 billion to $10 billion met or exceeded most estimates, signaling confidence that underlying profitability remains intact despite near-term disruptions.
The tariff revelation proved particularly significant. CEO Jim Farley disclosed that a regulatory change to tariff credits on auto parts—effective November 1st instead of the expected May 3rd—created an unexpected $900 million to $1 billion hit in Q4 2025, bringing total 2025 tariff costs to approximately $2 billion. CFO Sherry House explained this was a one-time timing impact, with the credit now available going forward. Analysts noted Ford's unique exposure as "the most American company" with domestic production far exceeding competitors, making tariff policy critically important to margins.
Analyst consensus remains cautiously constructive with a "Hold" rating.
Bulls point to management's decisive EV pivot toward affordable high-volume platforms (launching 2027), the $1 billion annual cost improvement target, Ford Pro's durable commercial moat, and the expanding Ford Energy battery storage business as reasons for optimism. The regulatory tailwind from EPA emissions standard resets is expected to deliver approximately $500 million in reduced compliance costs annually.
Bears counter with concerns about sustained Model e losses ($4 billion to $4.5 billion expected in 2026), high leverage (debt-to-equity ratio of 2.20), Novelis-related uncertainty ($1.5 billion to $2 billion in temporary 2026 aluminum supply costs), and intensifying F-150 competition from GM and Ram.
#Strategic and Operational Highlights
Ford accelerated transformation across three strategic pillars.
Commercial leadership: Ford Pro diversified revenue beyond vehicle sales, with software and physical services growing to 19% of segment EBIT. New partnerships like ServiceTitan broaden reach into the trades, while specialized dealer investments deepen the competitive moat.
Consumer strength: The company expanded off-road and performance lineups, with vehicles like Bronco RTR and Mustang Dark Horse SC extending leadership. Ford won North American Truck of the Year for an unprecedented sixth consecutive year. Revenue share in the U.S. pickup market grew nearly two full points.
EV transition: Management pivoted from compliance EVs to a cost-efficient Universal EV (UEV) platform targeting the profitable $35,000 segment, launching with a mid-size pickup in 2027. The strategy emphasizes hybrids and extended-range EVs (EREVs) for applications like large trucks where pure BEVs underperform.
Ford Energy emerged as a strategic diversification play, with $1.5 billion of $2 billion total investment planned for 2026. The business leverages LFP battery technology advantages and manufacturing expertise to serve utilities, data centers, and grid storage customers—opening high-margin, repeatable commercial demand beyond automotive.
Technology investments: Ford is bringing electrical architecture in-house to lower costs, reduce supply chain risk, and enhance user experience differentiation. Level 3 autonomy (Latitude) will launch with the UEV platform at affordable price points ($30,000-$35,000), a contrast to luxury-focused competitors, driven by cost savings from internal development using former Argo AI talent.
Global partnerships: Agreements with CATL (battery technology), Renault (European B-segment EVs), and Volkswagen (commercial van scale) demonstrate capital-efficient collaboration where IP will commoditize.
#Management Commentary and Outlook
CEO Jim Farley stated Ford closed 2025 "a much stronger business with a solid foundation to achieve our target of 8% adjusted EBIT margin by 2029," emphasizing cost and quality improvements, modernized talent and IT infrastructure, and a "vibrant and profitable product and technology roadmap." CFO Sherry House projected 2026 adjusted EBIT of $8 billion to $10 billion, adjusted free cash flow of $5 billion to $6 billion, and capital expenditures of $9.5 billion to $10.5 billion (including ~$1.5 billion for Ford Energy). The outlook assumes U.S. SAAR of 16 million to 16.5 million units and flat industry pricing.
Excluding Novelis impacts, tailwinds include favorable mix from low-margin nameplate sunset (Escape/Corsair), benefits from U.S. regulatory changes (~$500 million in reduced credits), and 6.5% growth in high-margin software/services profit. Headwinds include $1 billion in higher commodity costs (inflation and DRAM pressure), UEV platform investment, Ford Energy ramp costs, and cycle plan actions. Management expects roughly flat costs overall, with $1 billion in lower tariffs offsetting Novelis temporary costs and strategic investments.
#Investor Takeaway
Ford's Q4 results reveal a company executing a pragmatic pivot: strong Ford Pro and Blue franchises are offsetting Model e losses while management repositions the EV strategy for profitability rather than volume mandates.
The $2 billion Novelis impact and $2 billion tariff costs obscured underlying strength—without these factors, 2025 EBIT would have reached $7.7 billion, demonstrating operational momentum. However, the path forward carries meaningful execution risk.
The Novelis recovery assumes aluminum supply normalization between May and September 2026, with $1.5 billion to $2 billion in temporary costs that won't repeat in 2027. The UEV platform launching in 2027 must prove Ford can profitably compete at $35,000 price points where Tesla has demonstrated viability. Cost discipline remains critical—the $1 billion annual improvement target builds on $1.5 billion achieved in 2025 but faces commodity headwinds and platform investment requirements.
The 2026 EBIT guidance of $8 billion to $10 billion (midpoint $9 billion) implies significant H2-weighted recovery, requiring flawless execution on Novelis mitigation, F-150 competitiveness amid intensifying share battles, and continued Ford Pro pricing discipline in a normalizing commercial market.
The market's muted 2.1% positive reaction and analyst consensus near current levels suggests investors are taking a "show me" stance—willing to give credit for strategic clarity but demanding proof of margin recovery and EV economics before rewarding the stock with meaningful upside.
#What's Next
Key catalysts investors should monitor:
Monthly production and sales data (released early each month) to track Novelis volume recovery and F-Series market share trends against GM and Ram competitive pressures
Q1 2026 earnings (late April) to validate whether EBIT remains flat sequentially as guided and whether Ford Pro pricing holds amid commercial market normalization
Novelis aluminum mill restart timing and cost trajectory—any delays beyond the May-September window would extend $1.5 billion to $2 billion temporary cost headwinds
Ford Energy customer contract announcements and 2027 revenue visibility as the $1.5 billion 2026 CapEx investment translates to commercial traction
UEV platform development milestones and cost structure details ahead of 2027 launch, particularly battery economics with CATL partnership
Regulatory clarity on EPA emissions standards implementation and timing of the ~$500 million annual credit benefit
Ford Blue inventory management—maintaining 55-65 day supply targets while rebuilding F-150 stocks in H2 2026 without promotional pressure