Ford Motor Co. announced a significant increase in its full-year financial outlook, marking the second such raise this year. The automaker now anticipates adjusted earnings before interest and taxes (EBIT) to be between $10 billion and $11 billion, up from the previously projected range of $8.5 billion to $10.5 billion. This positive adjustment is largely attributed to strong vehicle pricing and a high demand for its profitable SUVs and trucks, which helped offset tariff costs and broader economic uncertainties. Ford also raised its adjusted free cash flow forecast to $6 billion to $7 billion, an increase from $5 billion to $6 billion.
While Ford reported a Q2 net loss of $1.3 billion, this was primarily due to one-time special charges totaling $4.2 billion related to a previously announced reduction in its all-electric vehicle program. These charges included $3.6 billion for restructuring its BlueOval SK joint venture battery plant with SK On and $500 million from a canceled EV program. Despite these charges, the company's adjusted earnings per share of 42 cents surpassed LSEG analyst forecasts of 35 cents per share. Total revenue for the quarter was $48.3 billion.
The core profitability of Ford's traditional Ford Blue business saw a notable improvement, with its expected full-year earnings now projected to be between $5 billion and $5.5 billion. The company's Q2 core profit specifically rose nearly 20% to $2.5 billion, indicating that strong U.S. demand for its vehicles continues to be a key driver. Ford's finance chief, Sherry House, noted the company is becoming "fitter," and CEO Jim Farley highlighted the company's progress in becoming more profitable and disciplined.
Analyst reactions were positive, with Jefferies upgrading Ford's stock to "buy" ahead of the earnings report, expecting momentum to build. Philippe Houchois of Jefferies suggested that Q2 would mark a trough for the company, with production normalizing after previous disruptions. The Bronco franchise, in particular, demonstrated strong growth with a 20% increase in sales during the first half of the year, underscoring robust consumer demand for Ford's SUVs.
However, Ford's EV and software unit continued to record losses, totaling $919 million in the second quarter. The company still projects annual losses of about $4 billion in this segment, although this is a slight improvement from earlier expectations of losses between $4 billion and $4.5 billion. Ford plans to begin production of a $30,000 electric pickup in 2027, even as U.S. EV sales for the company declined 57.4% in the first half of the year. The company is leaning on partnerships, including with Renault and China's Geely, to increase EV production globally.
