Ford Raises Lower End of 2026 Earnings Forecast to $10.5 Billion
Key Facts
Ford raised the lower end of its 2026 adjusted earnings before interest and taxes forecast to $10.5 billion, while keeping the upper end at $11 billion, according to its earnings filing with the U.S. Securities and Exchange Commission. The previous range was $10 billion to $11 billion, meaning the company increased its lower-end estimate after its third-quarter results. The company said it generated revenue of $49.5 billion during the quarter, down 2% year over year. By contrast, adjusted earnings before interest and taxes rose 3% to $2.7 billion. The figures show earnings improving despite lower revenue, while losses in the electric-vehicle business remain part of the results.
Ford attributed the increase in earnings to an improved product mix, with a greater share of higher-margin products, and to cost controls. The company said higher earnings on a lower revenue base reflected "a stronger product mix consisting of higher-margin products." Management thus linked improved profitability to the quality of sales and expense management, while total revenue remained below its level a year earlier. Adjusted free cash flow was $4.7 billion in the third quarter. The company also said total liquidity exceeded $46 billion at quarter-end, reflecting the cash resources available to it, according to its filing.
Ford Model e, which includes the electric-vehicle business, recorded an operating loss before interest and taxes of $1.1 billion in the third quarter. The loss was 25% lower than a year earlier, indicating year-over-year improvement in the segment despite continued substantial losses. For the full year, Ford expects the segment's loss before interest and taxes to be about $4 billion in 2026. This estimate refers to Ford Model e's adjusted operating loss and is not a general figure for all electric-vehicle losses. The contrast between the narrower quarterly loss and the elevated annual forecast puts the cost of the electric transition among the company's key financial guidance items.
On costs, Ford raised its estimate for commodity headwinds in 2026 to about $2.5 billion, from about $2 billion previously, according to Reuters. The report linked the increase to higher costs for metals, fuel and chips. The higher estimate adds cost pressure as quarterly revenue declined, despite an increase in adjusted earnings. Chief Financial Officer Sherry House said the company expects its underlying profitability in 2027 to be roughly at the 2026 level. That means management's outlook, according to the statement, does not assume an increase in underlying profitability next year compared with this year.
As part of its plans for the coming years, Ford is targeting an adjusted earnings-before-interest-and-taxes margin of 8% by 2029. It also said Ford Energy aims to provide annual capacity of 20 gigawatt-hours by the end of 2027. The company plans to reach the full run rate for that capacity in the third quarter of 2028. These dates set out a phased path to expanding the energy business, with full operations scheduled about three quarters after the target capacity becomes available. These goals remain part of the company's announced plans, alongside its 2029 margin target.
Ford declared a regular fourth-quarter cash dividend of 15 cents per share, payable on December 1 to shareholders of record on November 10, according to its earnings filing. The dividend announcement came alongside an increase in the lower end of its annual earnings forecast, despite a higher estimate for commodity headwinds and continued Model e losses. The stock closed at $11.71 on October 27, according to EL7 data. After the results were announced, the stock fell about 1.5% in after-hours trading on October 28, according to Reuters. The after-hours move offers an immediate read on the market's response to the announcement, while the dividend and its record date remain set for fourth-quarter shareholders.