Ford posts Q2 beat, but warns of tariff impact

Yahoo

15 hours ago

Ford (F) reported second quarter results that topped Wall Street estimates on both the top and bottom lines. However, the automaker warned that it expects to take a $2 billion hit from auto tariffs this year. Yahoo Finance Senior Autos Reporter Pras Subramanian breaks down the results in the video above.
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Shares of Ford, they are lower after releasing their second quarter results and here to break it all down. We got Yahoo Finances' very own Pras Subramanian, Pras.
Yeah, Josh, we're talking earlier, you know, so it's an earnings beat, revenue beat, but that's not really what the big story is here. The story is increased their full year tariff exposure, right? To three billion, sorry, $2 billion to $3 billion if you include, if you don't include mitigation efforts, $800 million in tariffs uh hit this quarter in Q2. So that's what's happening. Um, they did put guidance back in. They said full year guidance of just a t bit of $6.5 to $7.5 billion, a little bit lower than what they had what they had in Q1 when they pulled it and back in uh earlier this year. So uh you know, they're getting this this tariff hit even though they're the most US-centric automaker uh because they have to pay tariffs not just for, you know, stuff coming from Canada, Mexico, but also they're counting aluminum steel tariffs. Uh they say that not all the automakers are counting that and that's why their tariff exposure seems high for a company that makes a lot of cars in the US. So uh lots of discussion in the call, uh EV losses as well. So
I was gonna ask, I mean, so stock down we got, all right, we're down about 3%. On that call, what would be top of mind for you in terms of themes and trends you would be listening for?
So I I they're going to talk about what's going on with tariff exposure. What exactly are mitigation efforts? This came up in a in a in a round table call just now. They said the mitigation efforts are higher prices, uh using bonded carriers to avoid US tariffs between Mexico and Canada, that sort of thing. Uh will CEO Jim Farley talk about the new tariffs on the UK and EU and how they might be unfair compared to what's going on with Canada and Mexico, right? Uh will will you see a South Korea tariff deal with 15%? We're again, he's complaining about that. It's not fair to US manufacturers who, you know, send a lot of parts over the border, right? So a lot going on there from that from the call, I think. Um, that plus of course, we mentioned the EV business still losing money. Uh good quarter from revenue, they sold a lot of cars, but this is not turning in the corner with regards profitability, so that's gonna come up too.
Final question, who would you say is in a better position sort of to navigate to weather these tariff dynamics we're talking about here? Would you say is it Ford or is it GM?
If we're talking about big three, I would have said I would have I would have said Ford, and they did have less tariff expense compared to GM. But the thing is, they're saying that GM and Ford don't calculate the same things. It's not apples to apples, right? So until you get that calculation, it seems like Ford is because they make 80% of their US, 80% of vehicles sold in the US for Ford are made in the US. That's the highest percentage of any of the big three. So that seems good for them. They are a more US-centric business. Uh yes, they sell cars in Australia and the in Europe and Asia too, but the US is their bread and butter. So, uh we'll hear more about that. But one of the things that could be coming up is some of these companies are making their own tariff deals, right? And there was talk that Ford was was trying to do that. Like let's say you make a deal with Trump saying I'll build a factory in Ohio if you can give me a better tariff deal. And that's sort of that's happening, right? That's on the table, which seems totally inconsistent with the national policy of tariffs, right? So that could also come up on the call.
All right, Pras, we'll be listening. Thank you, sir.
Thank you.