Ford Motor(F) ZACKS·2025-03-13 18:25Company Overview - Ford is planning to invest up to €4.4 billion (6.3 billion) in debt [1][2] - The investment aims to stabilize Ford's operations in Europe, which have been struggling due to rising costs, weak demand, and competition from Chinese EV makers [1][2] Financial Performance - Ford has been incurring losses in Europe for several years, leading to cost-cutting measures, including plans to cut 4,000 jobs by 2027 [2] - The Model e division, focused on electric vehicles, reported a loss of 4.7 billion loss in 2023, with expectations of another loss of 5.3 billion in 2024 to 67 billion in 2024, with EBIT rising from 9 billion, driven by strong demand for Super Duty trucks and Transit vans [9] - The company is focusing on software and service subscriptions as potential growth drivers moving forward [9] Liquidity and Dividends - Ford ended 2024 with 28 billion in cash, supporting its Ford+ strategy and cost-cutting initiatives [11] - The company offers a dividend yield of over 6%, significantly higher than the S&P 500's average of 1.31%, and plans to return 40-50% of free cash flow to investors [11][13] Market Challenges - Ford faces challenges from proposed 25% tariffs on Mexican and Canadian imports, which could increase costs and disrupt operations [14] - The company anticipates a steep decline in first-quarter 2025 adjusted EBIT, projecting it to break even compared to 7-10.2 billion in 2024, with rising warranty costs and incentives further pressuring margins [15] Future Outlook - The Zacks Consensus Estimate indicates a decline in 2025 sales and EPS by 4% and 22%, respectively, but anticipates growth in 2026 [17] - Despite restructuring efforts and strong performance in Ford Pro, near-term headwinds such as weak demand and rising competition are expected to impact profitability [19]