Ford Temporarily Halts Forecasting Due to Concerns over Tariff Impacts
Update on Auto Tariffs and Ford's Predicament
questions about the auto industry's present state revolve around the shifting landscape, especially with recently imposed tariffs. Let's dive into the current state of auto tariffs and Ford's struggles amidst this uncertain environment.
Ford, known as F, recently announced first-quarter earnings beating analysts' predictions, but they suspended their full-year forecast due to concerns over auto tariffs. The company projected a $1.5 billion hit to its adjusted earnings before interest and taxes for this year because of tariffs.[1] This led to the suspension of their outlook, pointing towards the potential for industrywide supply chain disruption.
Ford reported adjusted earnings per share of 14 cents for Q1, a significant 71% drop compared to the previous year's figures, on revenue that dropped by 5% to $40.7 billion. Analysts had anticipated a loss of 1 cent per share on revenue of $38.49 million.[2]
Last week, Ford's rival, General Motors (GM), lowered its outlook, warning that Trump administration's auto tariffs could bring about a $4 billion to $5 billion impact on their full-year profit. Although Ford and GM manufacture most of their cars in the U.S., many parts used to build them are imported.[3]
Post-earnings announcement, Ford shares took a dive, falling approximately 3% in after-hours trading. Over the past 12 months through Monday's close, Ford's stock has lost close to a fifth of its value.[4]
While tariffs on completed automobiles are already in effect, tariffs on automobile parts are set to start on May 3, 2025, with certain exemptions in place. These tariffs were introduced under Proclamation 10908, issued on March 26, 2025, citing national security concerns related to import threats.[5]
If you're interested in trading auto-related CFDs during this tumultuous period, Pepperstone offers a platform for that.
(Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs.)
References:
- 1. Ford suspends full-year forecast as costs of U.S. tariffs soar
- 2. Ford Q1 Earnings Report: Net Income Soars, Q2 Delayed Due To Tariff Uncertainties
- 3. The tariff tit-for-tat that's putting the hurt on U.S. automakers
- 4. Ford (F) Shares Are Down Over 19% in the Last Year (XOM, WMT, AAPL)
- 5. Trump Administration Imposes Tariffs on Cars, Trucks, and Parts
- The auto industry is grappling with the repercussions of recently imposed tariffs, particularly on Ford, as evidenced by the company's suspension of its full-year forecast due to concerns over these tariffs.
- Ford's Q1 earnings surpassed analysts' predictions, yet the company anticipates a $1.5 billion hit to its adjusted earnings before interest and taxes for this year because of tariffs.
- Industry-wide supply chain disruptions are a potential consequence of these tariffs, as illustrated by Ford's staggering 71% drop in adjusted earnings per share for Q1 and a 5% decrease in revenue.
- General Motors (GM) has also expressed concerns, warning of a $4 billion to $5 billion impact on their full-year profit due to the Trump administration's auto tariffs.
- Trading auto-related Contracts for Difference (CFDs) can be a strategic move during this volatile period, with Pepperstone providing a platform for such trades.
- Despite tariffs on completed automobiles already being in effect, tariffs on automobile parts are scheduled to start on May 3, 2025, with some exemptions put in place, as per Proclamation 10908 issued on March 26, 2025, citing national security concerns related to import threats.
