Ford Posts Earnings Beat. Its Outlook Is Improving. -- Barrons.com

By Al Root

Ford Motor reported better-than-expected adjusted second-quarter operating profit and raised its full-year financial guidance. Those are both good things for investors.

Tuesday evening, the Detroit car maker announced an operating profit of $2.5 billion from sales of $48.3 billion. Wall Street was looking for second-quarter operating profit of $2.1 billion from sales of $47.2 billion. A year ago, Ford reported an operating profit of $2.1 billion from sales of $50.2 billion.

Operating profit improved, but there was a GAAP net loss of $1.3 billion.

GAAP is short for generally accepted accounting principles. A big difference between GAAP and adjusted earnings isn't ideal, but Ford and other auto makers have had several adjustments related to writing off recent EV investments. The gap between GAAP and adjusted numbers was largely related to a previously announced $3.6 billion charge.

Ford's EV business lost about $1.3 billion in the second quarter. Ford is expected to have a full-year loss of about $4 billion, a little lower than the $4.25 billion loss expected in April. The loss includes an incremental $1 billion investment in Ford's universal EV, or UEV, platform, which is intended to lower production costs, helping Ford make money on electric cars. UEV sales should start around 2027. Ford's EV lost about $4.8 billion in 2025.

Overall, Ford expects 2026 operating profit of $10 billion to $11 billion, up from a prior range of $8.5 billion to $10.5 billion.

Ford generated a 2025 operating profit of $6.8 billion, down from $10.2 billion in 2024. Tariffs shaved roughly $2 billion off operating profit in 2025. A fire at aluminum supplier Novelis cost Ford another $2 billion.

Novelis recovery will add about $1 billion in operating profit relative to the 2025 result, according to Ford.

Overall, the quarter looks fine. The guidance increase of $1 billion at the midpoint exceeded General Motors' hike. GM raised its full-year guidance by $500 million at the midpoint when it reported second-quarter numbers this past week.

A solid report doesn't guarantee a big jump for Ford stock on Wednesday. Ford also boosted guidance when reporting first-quarter numbers in April. Still, shares dropped 1.3% in response. At the time, investors were still worried about the impact of higher oil prices and cost inflation.

Since the first-quarter report, investors have become a little more comfortable with the outlook. Ford stock was roughly $12 after first-quarter earnings. It entered Tuesday trading closer to $15.

Things still look OK for the U.S. car business. Ford CFO Sherry House called the consumer resilient despite inflation.

RBC analyst Tom Narayan was looking for an update about the United States-Mexico-Canada trade pact. The U.S. opted against renewing the agreement, which opened it to renegotiation; trade volatility could weigh on shares in the second half of the year, he says.

Ford builds the most vehicles in the U.S., and also exports the most vehicles out of the U.S. The company essentially wants a level playing field, ensuring that U.S. auto makers aren't disadvantaged versus, say, Japanese or Korean auto makers just because the U.S. firms such as Ford have some Mexican or Canadian capacity and parts suppliers. House said USMCA negotiations are ongoing.

Shares of the car maker rose 1.9% in regular trading, closing at $14.96, while the S&P 500 rose 0.2% and the Dow Jones Industrial Average gained 1%.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 28, 2026 16:06 ET (20:06 GMT)