Ford Shares Drop on Weak EV Outlook, Tariffs Concerns
Key Takeaways:
* Ford shares declined on Thursday after the automaker's downbeat outlook was influenced by losses in its electric vehicle (EV) business.
* Ford Model e, Ford's EV division, reported a projected 2024 EBIT loss of $5.1 billion.
* CEO Jim Farley highlighted potential industry losses due to tariffs on Canada and Mexico.
Earnings and Outlook:
Ford reported adjusted earnings per share (EPS) of 39 cents and revenue of $48.2 billion for the fourth quarter, exceeding consensus estimates. However, the automaker's projected 2025 EBIT of $7.0-$8.5 billion fell short of the 2024 estimate of $10.2 billion. Ford attributed the decline to "headwinds related to market factors."
Ford Model e reported a 2024 EBIT loss of $5.1 billion, reflecting ongoing investments in future products. The division projected an EBIT loss of $5.0-$5.5 billion in 2025. CEO Farley noted increased competition and pricing pressure in the EV market.
Tariff Concerns:
CEO Farley expressed concern that proposed tariffs on trading partners would impact the industry. He warned that 25% tariffs from Canada and Mexico could wipe out billions of dollars in profits and negatively affect U.S. jobs and the industry's value chain.
Market Reaction:
Ford shares opened over 6% lower on Thursday. The stock has lost more than 20% of its value in the past year.