Ford Stock: The Quarter That Coulda, Woulda, Shoulda Been Great

This year hasn't exactly been kind to most automakers, especially the folks at the Blue Oval, Ford Motor Company (NYSE: F). The company has had to deal with setting a record for vehicles recalled in the U.S. market, ever-changing trade policies and the removal of the $7,500 federal electric vehicle (EV) tax credit, and of course a supplier fire that will impact production of its highly profitable F-Series trucks.

Despite the mounting challenges, Ford posted a third quarter that topped estimates, but here's what investors need to know.

So close to greatness

Little did investors know that ahead of Ford's third-quarter conference call the company was on track to boost full-year guidance -- until disaster struck. Instead, investors are left grappling with the reality of the Novelis aluminum plant fire in New York that will result in a 2025 adjusted earnings before interest and taxes (EBIT) headwind of $1.5 billion to $2 billion. It's important for investors to note this will impact full-year cash flow, and potentially the company's upcoming traditional supplemental dividend based off the prior year's adjusted free cash flow.

Before covering the rest of Ford's strong third quarter, let's stick with the theme and fully explain the supplier fire and its impacts. While the supplier fire will result in a headwind of $1.5 billion to $2 billion, Ford expects to mitigate at least $1 billion of adjusted EBIT in 2026 and the full impact of the plant fire will be felt during the fourth quarter. One thing Ford is doing is adding 1,000 workers early next year to plants that produce the affected vehicle, in order to recoup about half of the 100,000 units it expects to lose this year due to the fire.

Ford F-150 Lightning. Image source: Ford Motor Company.

Because of those impacts Ford is now lowering its full-year guidance to adjusted EBIT of $6 billion to $6.5 billion, from the prior range of $6.5 billion to $7.5 billion, and far lower than the $8 billion-plus management was previously prepared to raise the guidance to.

Additional challenges

Ford is also navigating choppy waters surrounding President Donald Trump's tariffs on imported vehicles and automotive parts that cost the company $700 million during the third quarter, net of mitigation efforts, with a full-year net impact of about $1 billion.

All in all, Ford reported automotive revenue of $47.2 billion compared to the $43.7 billion estimated per Bloomberg consensus. Adjusted earnings per share (EPS) checked in at $0.45, well over the $0.36 per share analysts expected. Adjusted EBIT also checked in well ahead of estimates at $2.6 billion, compared to the $2.02 billion expected.

Ford's strong third quarter was led by its Ford Pro division, responsible for its commercial business. Ford Pro generated $1.99 billion EBIT with margins checking in at a solid 11.4%. Ford Blue, its traditional vehicle and hybrid business, generated $1.5 billion EBIT on less lucrative 5.5% margins. Meanwhile, its Model-e division, responsible for EVs, had a larger loss than the prior year, up to $1.4 billion during the third quarter.

What it all means

The company is doing its best to navigate complicated and choppy waters that include tariffs, trade policy, supplier fires, and massive recalls, among other developments. Investors would be wise to focus on what the company can control and take the supplier fire impacts with a grain of, albeit expensive, salt.

Ford appears to be making the right strategic decisions for propulsion, partnerships, and its underlying business and could be a rebound story in 2026 if the company can lower warranty costs, improve Model-e results, and mitigate tariffs.

Daniel Miller has positions in Ford Motor Company. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.