Ford raises 2026 profit outlook despite higher costs and truck production challenges
Ford increased the lower end of its full-year earnings guidance after third-quarter adjusted earnings beat expectations, even as commodity costs climbed and F-150 production faced new disruptions.
On the Dash:
- Ford raised the lower end of its 2026 adjusted operating profit guidance by $500 million to $10.5 billion, keeping the upper end at $11 billion.
- The automaker raised its full-year commodity cost estimate to nearly $2.5 billion from about $2 billion, citing higher prices for copper, steel, fuel and chips, along with Middle East conflict-related pressures.
- Ford is prioritizing disciplined F-150 production and targeting a 55- to 60-day vehicle supply, below its typical 80- to 100-day range, as it works to recover from supplier-related disruptions.
On October 28, Ford reported third-quarter core profit of $2.7 billion, slightly up from the previous year. While adjusted earnings were 49 cents per share, beating LSEG analyst expectations of 40 cents, the company generated $49.5 billion in revenue, with a net income of $2 billion.
Ford has raised the lower end of its full-year adjusted earnings before interest and taxes (EBIT) guidance by $500 million to $10.5 billion, while the upper end remains at $11 billion. CFO Sherry House said Ford expects core profitability in 2027 to be roughly in line with 2026.
The company also raised its full-year estimate for commodity costs to nearly $2.5 billion, up from about $2 billion. These cost pressures stem from rising copper and steel prices, fuel expenses, chip prices, and the impact of the ongoing conflict in the Middle East. Additionally, higher diesel prices are driving up freight costs, creating further pressure across the automotive supply chain.
According to the automaker, it expects prices to rise by about 1% this year. Meanwhile, an undisclosed supplier issue disrupted production of its best-selling F-150 pickup for nearly a week last month, following earlier production losses from a fire at Novelis, a New York-based aluminum supplier, last year. However, House said Novelis has largely recovered operationally.
CEO Jim Farley also said Ford is producing F-150 trucks at a much higher rate than usual to replenish supply. The company is targeting a vehicle supply of 55 to 60 days, compared to its typical range of 80 to 100 days.
Trade negotiations could affect North American automakers
In trade-related news, negotiations could impact North American automakers. According to RBC Capital Markets analyst Tom Narayan, both Ford and General Motors could benefit from progress toward a U.S.-Mexico trade agreement before the end of the year. Ford depends on an interconnected North American manufacturing network, producing the Bronco Sport and Maverick in Mexico and Super Duty trucks in Canada.
Farley has called for a swift resolution to broader negotiations regarding the United States-Mexico-Canada Agreement (USMCA) to help U.S. automakers compete with Japanese and South Korean manufacturers. Currently, U.S. tariffs on Canadian steel and auto imports stand at 25% and are scheduled to double on January 1. Reuters reported that the U.S. and Canada are working on a potential deal to ease these tariffs after trade talks broke down in August.
Despite pressure from the phaseout of the Escape SUV and declines in electric and hybrid vehicle sales, Ford’s U.S. vehicle sales fell 8.6% year-to-date through the third quarter. However, stronger-than-expected adjusted earnings and improved full-year guidance reflect continued confidence in its near-term profitability.