New York (AFP) – Ford raised its full-year profit forecast Wednesday after reporting stronger than estimated first quarter results, based partly on $1.3 billion in tariff refunds. The big US automaker sold fewer autos compared with a year ago but pointed to robust demand for higher-priced trucks and sport utility vehicles that contributed to higher earnings. Profits for the Michigan automaker came in at $2.5 billion, compared with $471 million in the year-ago period. Revenues rose 6.4 percent to $43.3 billion.
Ford’s quarterly results included the $1.3 billion tariff refund after the US Supreme Court in February struck down some of President Donald Trump’s levies. While Ford accounted for the refund in terms of profits, it held off on raising its cash flow forecast because it may not receive the actual reimbursement until late in 2026 or 2027, Ford Chief Financial Officer Sherry House said.
However, the better outlook on tariff costs was offset somewhat by the $1 billion more in expected 2026 commodity costs, with disruption from the Middle East war exacerbating an already difficult market for aluminum and steel, House added. “Even before the conflict in Iran, we were starting to see some global shortages, particularly in aluminum,” House said on a conference call with reporters. “Then that was coupled with the Middle East conflict.”
In a conference call with analysts later Wednesday, Ford CEO Jim Farley said the company was in “early discussions with the US government on some defense-related projects,” but he said the company would not discuss specifics. Farley was among the executives who participated in talks with US defense officials about playing a larger role in weapons production, the Wall Street Journal reported on April 15. The discussions, which predated the war in Iran, aimed to “increase production of munitions and other equipment as the wars in Ukraine and Iran deplete stocks,” according to the report.
Ford’s US rival General Motors, which the newspaper said was also involved in the talks, was not directly asked about the issue on its earnings conference call Tuesday. GM officials stated Tuesday that higher gasoline prices have not dampened consumer demand so far, but the company was monitoring the issue. House also described a muted impact, noting that many of Ford’s truck buyers have higher incomes with a stable employment outlook. Another group of truck buyers consists of commercial customers who need towing and hauling capacity. “These are nondiscretionary purchases for them,” she said of continued demand.
Shares fell 1.7 percent in after-hours trading.
© 2024 AFP
