How Is Ford's Stock Looking After Better-Than-Expected Earnings Results?

Ford Motor Company (NYSE:F) reported stronger-than-expected earnings results for its third quarter of the year and also slightly raised its full-year guidance.

The stock popped about 2% on Oct. 28, the day it reported earnings, but is still significantly trailing the broader market this year.

The auto giant reported an operating profit of $2.7 billion, $300 million ahead of Wall Street consensus estimates, while total revenue was $49.5 billion, beating estimates by $1.2 billion.

After raising its full-year guidance for adjusted earnings before interest and taxes (EBIT) in the second quarter, Ford once again raised its full-year EBIT guidance slightly to a range of $10.5 billion to $11 billion. Previously, the range had been $10 billion to $11 billion.

How is Ford's looking after the better-than-expected results?

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Higher commodity costs and continuing to right-size EV business

Ford's more traditional automobile segment generated EBIT of nearly $1.4 billion, down about 10% year over year.

Meanwhile, the company's electric vehicle segment generated an EBIT loss of over $1 billion, which is a strong improvement from the same period a year ago. Ford's commercial segment reported EBIT of roughly $1.67 billion, down year over year.

While the stock rose following the earnings report, it may have risen further had it not been for concerns about higher commodity, logistics, and memory costs.

On the company's earnings call, Ford's CFO Sherry House said commodity headwinds are now approaching $2.5 billion year-over-year, due to pressure on input costs, while high gas prices impact the company's freight and energy costs.

Furthermore, Ford expects these headwinds, as well as higher memory and logistics costs, to result in a $2 billion headwind in 2027. The company expects earnings in 2027 to be roughly in line with this year.

Ford also continues to make progress right-sizing its EV business. In late 2025, the company announced that it would scale back its money-losing EV business to focus on hybrid and more affordable EVs. Ford recorded a $19.5 billion loss as a result of this decision.

In the third quarter, losses in the EV business narrowed, despite Ford reporting a 31% dip in revenue year over year.

House said on the earnings call that the company is targeting the EV business to breakeven by 2029, although she doesn't expect a linear move to that goal, with higher expenses in 2027 and a "step-function change in profitability" in the first half of 2028.

Is the stock a buy

Following earnings, Goldman Sachs analyst Mark Delaney lowered his price target by $2 to $12 per share and maintained a neutral rating on the stock, primarily due to the higher, commodity, logistics, and memory costs expected in 2027.

One of the main draws of Ford is the company's roughly 5% trailing 12-month dividend.

Through the first nine months of the year, Ford has generated adjusted free cash flow of nearly $5.7 billion, while paying out about $2.4 billion in dividends.

The company has had to cut its dividend a few times since the Great Recession. The dividend looks safe right now, but the company is still a work-in-progress from an operational perspective, so I'm overall neutral on the stock right now.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.