Financial Data and Key Metrics Changes - The company reported a record revenue of $50 billion for Q2 2025, with an adjusted EBIT of $2.1 billion, reflecting year-over-year improvement in costs [8][32] - The full-year adjusted EBIT guidance was updated to a range of $6.5 billion to $7.5 billion, net of tariffs [9][38] - Adjusted free cash flow was solid at $2.8 billion, with a strong balance sheet showing over $28 billion in cash and $46 billion in liquidity [36][37] Business Line Data and Key Metrics Changes - Ford Pro's revenue grew 11% to nearly $19 billion, with a 12.3% EBIT margin driven by a strong product lineup and disciplined pricing [33] - Model E revenue more than doubled to $2.4 billion, with margins improving nearly 44 points due to a favorable product mix [34] - Ford Blue earned nearly $700 million in the quarter, reflecting profitable market share gains and higher net pricing [35] Market Data and Key Metrics Changes - In the U.S., Ford's sales grew 7 times faster than the industry, with market share up 1.7 points sequentially [20] - The company sold more electrified vehicles than its two main domestic rivals combined, with EVs and hybrids making up close to 14% of the U.S. mix [21] - Outside the U.S., Ford gained market share in key regions such as Canada, Europe, South America, and the Middle East [23] Company Strategy and Development Direction - The company is shifting capital towards Ford Pro, reallocating resources from future EV programs to accelerate growth in high-margin services [10] - Ford aims to enhance its product lineup with a focus on trucks and iconic products, while also investing in low CO2 emissions technologies [14] - The company is committed to improving vehicle quality and reducing warranty costs, with a focus on achieving world-class vehicle quality [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariffs, estimating a net headwind of about $2 billion for the year, while expressing confidence in the company's cycle plan [13][39] - The management team emphasized the importance of capital efficiency and cost improvement, with a strong balance sheet providing flexibility to invest through economic downturns [38][40] - The company is optimistic about the future, with a focus on sustainable improvements in warranty and material costs [44] Other Important Information - The company announced a regular dividend of 15 cents per share, payable on September 2, reflecting its commitment to return capital to shareholders [38] - Ford's transformation journey is well underway, with a focus on building a higher growth, higher margin, and more capital-efficient business [32] Q&A Session Summary Question: Drivers of guidance change and improvement - Management noted that the guidance reflects strong improvement in the business, particularly in cost areas, despite absorbing larger tariffs [42][43] Question: Sustainability of market share - Management expressed confidence in sustaining market share gains into the second half of the year, supported by a strong product portfolio [61][62] Question: Balancing emissions policy and EV technology - Management highlighted the importance of transforming engineering and supply chain processes to remain competitive against global OEMs, particularly Chinese manufacturers [70][71] Question: Impact of tariffs and compliance credits - Management discussed ongoing negotiations with the administration to simplify tariffs and reduce liabilities, emphasizing the potential upside for the company [83][84] Question: Electrification initiatives and regional commitments - Management indicated a focus on partnerships for EVs and a streamlined product lineup to balance investments across different regions [99]

Want to ask first about how you're offsetting these tariffs. I was on a call with Cherrie House, your CFO earlier, she said. The hit to growth would be about $3 billion this year from tariffs, but you're able to recover about a third of that.How are you doing that. Is it through pricing. Are you able to get it out of suppliers. What are you doing to get that back.It's all of it. But the biggest strength for us is Ford Pro our commercial business. And it's not just vehicles, it's also software on our parts b ...

Core Viewpoint - Ford is currently undervalued with a forward 12-month price-to-sales (P/S) ratio of 0.26, which is below industry levels and its own 5-year average, indicating potential investment opportunities despite recent stock performance [1][3][19] Valuation Comparison - Ford's P/S ratio of 0.26 is lower than General Motors' (GM) 0.27 and significantly lower than Tesla's (TSLA) 9.88, suggesting a favorable valuation compared to peers [1][8] - Despite a year-to-date stock increase of approximately 7%, Ford's valuation remains attractive compared to the industry's decline of over 19% [3][19] Growth Drivers - Ford Pro's strong demand and successful launch of the Super Duty are key catalysts for future earnings growth, supported by a growing number of paid software subscriptions [10][11] - The company has a robust liquidity position with around $45 billion in liquidity, including $27 billion in cash, which supports its investment priorities [11] - Ford's dividend yield of over 5% is appealing for income-focused investors, especially compared to the S&P 500's average yield of just over 1% [12] Challenges - The EV segment is facing significant losses, with a reported loss of $5.07 billion in 2024, driven by competition and high development costs [13] - The traditional internal combustion engine (ICE) business is expected to see reduced sales, impacting profitability [14] - Tariff-related challenges are projected to have a net negative impact of approximately $1.5 billion on adjusted EBIT in 2025 [15] Earnings Estimates - The Zacks Consensus Estimate indicates a year-over-year decline of 7% in sales and 40% in earnings for 2025 [16] - Recent revisions show a decrease in earnings estimates for the current quarter and upcoming periods, reflecting growing concerns about Ford's near-term performance [17] Conclusion - While Ford's stock appears cheap with a low P/S ratio and attractive dividend yield, the company faces headwinds in its EV and ICE segments, making the near-term outlook uncertain [19][20] - Existing investors may find reasons to hold due to the strong balance sheet and commitment to shareholder returns, while new investors may consider a wait-and-watch approach [20]

Core Insights - Ford and Toyota are major competitors in the global auto industry, with Toyota holding a significant lead in global sales and market capitalization [1][2] - In the U.S. market, Toyota sold 2.33 million vehicles in 2024, a 3.7% increase, while Ford sold 2.07 million vehicles, up 4.2% year over year [1] - On a global scale, Toyota sold 10.8 million vehicles compared to Ford's 4.5 million, with Toyota's market cap at approximately $250 billion versus Ford's $40 billion [2] Ford's Position - Ford remains a key player in the U.S. auto market, with popular models like the F-Series trucks and a strong presence in the SUV and crossover segments [6] - The company's hybrid strategy is gaining traction as full EV adoption slows, appealing to consumers seeking better fuel efficiency [7] - Financially, Ford exited Q1 2025 with $27 billion in cash and $45 billion in liquidity, allowing for investments in digital innovation and electrification [8] - Ford's dividend yield is approximately 6%, significantly higher than the S&P 500 average, with plans to return 40-50% of free cash flow to shareholders [8] - The Ford Pro business, focused on commercial customers, is expected to drive earnings growth due to strong demand and successful product launches [10] - Challenges include declining sales in traditional gas-powered vehicles, significant losses in the EV division, and potential tariff impacts costing up to $2.5 billion [11][12] - The Zacks Consensus Estimate predicts a 7% decline in sales and a 40% decline in EPS for Ford in 2025 [13] Toyota's Position - Toyota is recognized for its reliability and has exceeded earnings expectations, projecting growth in revenues and vehicle volumes for fiscal 2026 [14] - The company anticipates a 21% decline in operating income due to rising material costs, currency headwinds, and potential tariff impacts [15] - Toyota expects to sell 9.8 million vehicles in fiscal 2026, an increase from 9.36 million in fiscal 2025, with a focus on hybrid and plug-in hybrid sales [16] - The hybrid-first strategy is exemplified by the RAV4, which will be sold exclusively as a hybrid or plug-in hybrid starting in 2026 [17] - Toyota raised its annual dividend to 90 yen per share for fiscal 2025 and plans to increase it to 95 yen for fiscal 2026 [18] - The Zacks Consensus Estimate indicates an 8% growth in sales for Toyota in fiscal 2026, while earnings are expected to decline by 21% [18] Capital Efficiency and Valuation - Toyota has a return on invested capital of 4.8%, significantly higher than Ford's 1.77%, indicating better capital efficiency [19] - On a valuation basis, Toyota trades at a more attractive EV/EBITDA multiple compared to Ford, suggesting a more reasonable stock price relative to earnings [21] Conclusion - Both Ford and Toyota are navigating challenges in the evolving auto industry, with Ford having strong brand recognition and a high dividend yield, while Toyota benefits from global scale and a cautious electrification strategy [23][24] - Toyota's stronger capital discipline and strategic positioning provide it with a slight edge over Ford in the current market landscape [25]

Core Viewpoint - Ford's CEO Jim Farley warns that Trump's tariffs on imported cars and parts are expected to last at least three years, leading to industry-wide price increases and a potential loss of $1.5 billion for Ford this year [1][3]. Group 1: Financial Performance - Ford's Q1 adjusted EPS was $0.14, exceeding analysts' expectations of a loss of $0.043, with a net income of $471 million, down 64% year-over-year [3]. - The traditional vehicle segment (Ford Blue) and commercial vehicle segment (Ford Pro) performed strongly, achieving EBIT of $1.2 billion and $1.31 billion, respectively [3]. - The electric vehicle division (Model E) reported a loss of $849 million, but the loss was less than anticipated [3]. Group 2: Tariff Impact - The tariffs are expected to increase costs for popular Ford models like the Bronco Sport and Maverick by $5,000 or more, leading to price hikes in the industry as early as this summer [1][3]. - Ford has withdrawn its 2025 earnings guidance, which previously estimated operating profits between $7 billion and $8.5 billion, due to the impact of tariffs [3][4]. - The company acknowledges that the tariffs and potential retaliatory measures from other countries pose significant risks to financial performance [4]. Group 3: Market Reactions - Following the news of Farley's pessimistic outlook, Ford's stock initially rose but closed with a gain of only 2.6% [1]. - The discussions between Canadian Prime Minister Carney and Trump have influenced the stock movements of Ford and other automotive companies [1].

Core Viewpoint - Ford Motor Company is expected to report break-even quarterly earnings per share, indicating a 100% decline year-over-year, with revenues projected at $35.48 billion, reflecting an 11.1% decrease from the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised down by 8.7% over the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts project 'Revenues- Company excluding Ford Credit' to be $34.72 billion, a decrease of 13% from the year-ago quarter [5]. - 'Revenues- Ford Credit' is expected to reach $3.05 billion, showing a 5.2% increase year-over-year [5]. - 'Revenues- External Revenues- Ford Blue' is estimated at $18.21 billion, reflecting a 16.5% decline from the previous year [5]. - 'Revenues- Ford Pro' is forecasted at $16.41 billion, indicating an 8.8% decrease year-over-year [6]. - 'Revenues- External Revenues- Ford Model e' is projected at $809.82 million, representing a significant increase of 604.2% from the year-ago quarter [6]. Wholesale Units - 'Wholesale Units - Ford Blue' is expected to be 560.82 thousand, down from 626 thousand in the same quarter last year [6]. - 'Wholesale Units - Ford Pro' is projected at 354.08 thousand, compared to 409 thousand reported in the previous year [7]. - 'Wholesale Units - Ford Model e' is anticipated to reach 29.38 thousand, up from 10 thousand in the year-ago quarter [7]. Adjusted EBIT - 'Adjusted EBIT- Ford Credit' is estimated at $338.24 million, slightly up from $326 million in the previous year [8]. - 'Adjusted EBIT- Ford Blue' is projected at $239.79 million, a significant decrease from $905 million reported in the same quarter last year [8]. - 'Adjusted EBIT- Ford Pro' is expected to be $1.64 billion, down from $3.01 billion in the same quarter of the previous year [9]. Stock Performance - Over the past month, Ford Motor shares have recorded a return of +2.1%, while the Zacks S&P 500 composite has seen a -0.2% change [9].