How Ford's Q4 Shows More Profits on the Way

Ford Motor Company (NYSE: F), General Motors (NYSE: GM), and Stellantis (NYSE: STLA) certainly have much in common as automakers, especially considering their core profit engine, North America. Despite so much in common, the three stocks have traded wildly differently over the past three years with GM nearly doubling, Ford remaining largely flat with a 9% gain, and Stellantis shedding roughly half of its value. Ford's stock price seems stuck in a rut, and one way to help push its value higher is improved profitability, and the fourth quarter gave investors a tiny glimpse of how more profitability is happening.

The growth is there

If investors have been listening, there's a growth story for Ford. In fact, Ford just posted record revenue for the full-year 2025 at $187.3 billion, which was its fifth consecutive year of growth. Ford is currently pivoting its sales strategy away from less profitable full-electric vehicles (EVs), waiting for the market to develop before its next push in 2027, and toward historical gasoline-powered SUVs, trucks, and hybrid options which are much more profitable now. In fact, in part thanks to hybrid sales, Ford's U.S. market share moved 0.6 percentage points higher to 13.2%, its best sales performance since 2019.

Ford is working on a bottom-line growth story for investors, too.

Image source: Ford Motor Company.

Project: Improve margins

Like many of its competitors, Ford immediately went to work last year on reducing the impact of new tariffs slapped on imported vehicles and automotive parts. The good news is that it's been able to deliver investors $1.5 billion, excluding tariff impacts, in total cost reductions, which were 50% more than initial targets.

Further adding to the improving margin story is that Ford's Raptor and other performance trims, which generate higher average transaction prices (ATPs) and margin, accounted for a sizable 20% of its U.S. sales mix, a 2 percentage point gain. The F-Series, which hauls the big bucks for the Detroit icon Ford, just put the finishing touches on its 49th consecutive title as America's best-selling truck, with sales moving more than 8% higher in 2025.

Last, but certainly not least, is Ford's hidden gem: Ford Pro. The unit is responsible for Ford's commercial business -- think fleet, rental, large vans, and B2B sales -- and generated a hefty $6.8 billion in earnings before interest and taxes (EBIT) in 2025 at an impressive 10.3% margin, which is high in the mainstream automotive industry. For context, Ford Blue, the company's traditional vehicle-selling business, generated $3 billion EBIT in 2025 at a much more modest margin of 3%. Icing on the cake is that Ford Pro paid subscriptions were up 30% in 2025, compared to the prior year, with software business generating gross margins over 50%. Ford Pro's software and physical services contributed 19% of Ford Pro's EBIT (TTM).

What it all means

For investors, while Ford's bottom-line disappointed Wall Street analysts during Q4, and the company's stock price has been stuck in a rut for the past three years, there is still a growth story. Ford's top-line is setting records; it's working on improving margins and reducing costs; and when losses reverse in its Model e division, responsible for its EVs, it will be a huge boost to Ford's profitability in the next few years.

Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool recommends General Motors and Stellantis. The Motley Fool has a disclosure policy.