Ford raises profit projection floor and sees pressure of US$2.5 billion from commodities in 2026

Ford Motor exceeded expectations in the third quarter and raised the floor of its profit projection for the year, despite a 9% drop in sales volume and higher commodity costs. In an interview with Bloomberg Television, the company's chief financial officer, Sherry House, stated that the company does not expect relief in raw material costs in the short term. The video description points out that commodities could represent a US$2.5 billion obstacle this year.

According to House, adjusted operating profit (EBIT) rose 3% in the period, to US$2.7 billion, accompanied by US$4.7 billion in free cash flow. The result came despite a 9% drop in volume compared to the previous year and US$600 million in commodity pressure in the quarter. The adjusted EBIT projection for the year is now between US$10.5 billion and US$11 billion, with the lower margin of the range high.

According to the Bloomberg presenter, Ford shares were slightly down after the market closed, despite the announcement. In evaluating the vehicle, the balance indicates that cost control and firm demand for pickup trucks and sports utility vehicles help the company face growing pressure from inflation and war in the Middle East.

Pickup trucks, utilities and adjacent businesses

The executive attributed the performance to the investment in higher margin vehicles. The F-Series line is heading towards its 50th year as the best-selling pickup truck in the United States, and Ford was the leading brand in the three-row SUV segment in the quarter, with the Expedition and Explorer models. According to House, the company also remains the main commercial vehicle brand in the country. Off-road products already account for 25% of revenue.

The interviewer, Matt Miller, noted that demand remains strong despite higher gasoline and diesel prices and pickup truck prices that, on average, have risen 4% to 5% in one year and 40% in five years. The areas of software parts and services had a record quarter and already represent 10% of revenue, according to the executive.

Costs, artificial intelligence and the high-income consumer

For 2027, House projects that commodities, chip prices and logistics could generate pressure of around US$2 billion. Ford says it is on track for $1 billion in materials and warranty savings this year, without considering the effects of Novelis and tariffs, and aims to maintain the pace for the third year in a row while also reducing structural costs.

The executive said that the company uses artificial intelligence to identify where demand is, both in the parts business and in the distribution of products to dealerships, which, according to her, already translates into financial gains. House also admitted that rising stock markets and corporate investments in AI contribute to sales, as higher-income customers tend to feel more comfortable buying when the stock market is strong.

In the field of electric vehicles, House said that Ford has not abandoned the segment and cited partnerships with Renault and VW for a product line between 2028 and 2030. The company is also preparing a universal electric vehicle platform, and the first model, the Fathom, will have an entry price below US$30,000. She also highlighted Ford's leadership in hybrids, with the Maverick and the F-150.

For the investor, the balance sheet shows a manufacturer that sustains profitability with cost discipline and a focus on high-margin products, but which recognizes that input pressure is likely to persist until 2027.

Automatically translated from Portuguese.