Ford Posts Its Worst Quarterly Loss Since the Great Recession — But Wall Street Isn't Flinching

Ford's fourth-quarter net loss of $11.1 billion, or $2.77 per share, compared to net income of $1.8 billion, or $0.45 per share, in the same period a year ago. More than 100% of the loss was attributable to one-time special items — chiefly the $15.5 billion in charges Ford pre-announced in December when it restructured its electric vehicle strategy under the "Model e" division.

Stripping out those charges, Ford earned an adjusted $0.13 per share, still 32% below the $0.19 Wall Street consensus compiled by LSEG. That miss — Ford's first since 2024 and its largest in four years — was driven by a late-breaking tariff surprise. CFO Sherry House explained that Ford received updated guidance from the Trump administration on tariff credits for auto parts in late December, resulting in roughly $900 million in additional costs the company hadn't forecast. As of December 15, Ford had confirmed $7.7 billion in adjusted EBIT for the fourth quarter; the tariff revision dropped that to $6.8 billion.

Ford's quarterly revenue came in at $45.9 billion, down 4.8% year-over-year from $48.2 billion in Q4 2024, though it beat the $41.83 billion analyst estimate for automotive revenue. For the full year, Ford achieved record revenue of $187.3 billion, up 1% from $185 billion in 2024 — a fact that underscores the paradox of an automaker generating more revenue than ever while losing billions on the bottom line.

Two external shocks defined Ford's 2025 financial performance in ways management could not have anticipated. The first was tariff policy. Ford paid approximately $2 billion in tariffs during 2025, significantly more than the roughly $1 billion the company had guided for when it provided its October outlook. The gap was largely the result of shifting rules around credits for domestically sourced auto parts, which the administration revised multiple times during the year.

The second shock was the fire at a Novelis aluminum supplier plant in New York, which Ford said had a $2 billion impact during the second half of 2025. Novelis supplies aluminum for Ford's lucrative F-Series pickup trucks — the company's single most important product line. The plant is not expected to be fully operational until June 2026, according to the Wall Street Journal, with Novelis estimating repair costs of at least $255 million.

CFO House noted that Ford expects its net tariff impact to be roughly flat year-over-year at about $2 billion in 2026 as well. However, the company will need to source aluminum at higher tariff-affected prices until the Novelis facility reopens, effectively canceling out roughly $1 billion in expected tariff savings from other policy adjustments. "We will see a billion-dollar benefit roughly in 2026; however, this year, due to the Novelis impact, we're going to have tariffs increasing in order to secure aluminum that is roughly the same amount of that savings," House told reporters. The interplay between trade policy and supply chain disruption has created a cost environment where gains in one area are consumed by losses in another.

Ford's decision in December to dramatically scale back its electric vehicle ambitions resulted in $15.5 billion in special charges during Q4 — the accounting recognition of billions in stranded investments, cancelled programs, and asset write-downs. But even setting aside those one-time items, Ford's EV unit remains a persistent financial drain.

For 2026, Ford expects its "Model e" electric vehicle division to lose between $4 billion and $4.5 billion, a continuation of losses that have plagued the unit since Ford began breaking out its results in 2023. The company's strategy now centers on offsetting those losses with earnings from its two profitable divisions: "Ford Pro," the commercial and fleet business, which is expected to generate $6.5 billion to $7.5 billion in pre-tax earnings, and "Ford Blue," the traditional internal combustion engine business, expected to produce $4 billion to $4.5 billion.

The math works on paper — Ford Pro and Blue together should generate $10.5 billion to $12 billion, more than covering Model e's losses and supporting the company's adjusted EBIT guidance of $8 billion to $10 billion. But the arrangement highlights a structural tension: Ford is essentially using the profits from trucks and vans to subsidize an EV business that has yet to prove it can reach profitability. CEO Jim Farley has framed the EV pullback as a strategic reset, not an abandonment, but the scale of losses raises questions about whether EV profitability is achievable within the current product cycle.

Ford shares were up 0.85% to $13.69 on Wednesday, trading on volume of 66.9 million shares — well above the 57.4 million average. The stock has gained over 62% from its 52-week low of $8.44, though it remains below its 52-week high of $14.50. At a market cap of roughly $53.5 billion, Ford trades at a trailing P/E of 11.68 and offers a dividend yield of approximately 4.4%.

The muted reaction suggests investors have largely accepted that tariff disruptions are a feature, not a bug, of the current operating environment. The Motley Fool's analysis noted that "the market has priced in the idea that the White House's tariff policies can change quickly," and that Ford's explanation of the miss — an externally imposed cost outside the company's control — didn't signal any deterioration in the underlying business.

The comparison with crosstown rival General Motors is instructive. GM posted a $2.7 billion net loss in its own Q4 2025, with revenue of $45.3 billion — nearly identical to Ford's top line. But GM trades at a market cap of $75.2 billion, or roughly 41% more than Ford, with a P/E of 24.67 and shares at $80.66. GM's stock has nearly doubled from its 52-week low of $41.60. The valuation gap between the two Detroit automakers reflects the market's greater confidence in GM's strategic positioning, though both companies are navigating the same tariff and EV headwinds.

Meanwhile, Ford boosted its companywide employee bonus to 130% of target, according to Reuters, citing improvements in initial vehicle quality — a signal that management sees operational momentum even amid the financial turbulence.

Ford's 2026 guidance represents a significant step up from 2025 across every major financial metric. The company is targeting adjusted EBIT of $8 billion to $10 billion, compared to $6.8 billion last year — an increase of 18% to 47% at the midpoints. Adjusted free cash flow is guided to $5 billion to $6 billion, up from $3.5 billion in 2025. Capital expenditures are expected to rise to $9.5 billion to $10.5 billion, up from $8.8 billion, reflecting continued investment in new product launches and manufacturing upgrades.

Analyst estimates for 2027 suggest expectations of modest but steady growth, with consensus EPS estimates of approximately $0.47 per share on revenue averaging around $47.8 billion per quarter. The forward-looking picture implies that analysts expect Ford to return to consistent profitability, but at levels that are hardly transformative for a company with $164 billion in total debt and $137 billion in net debt on its balance sheet.

The critical question is whether Ford's profitable divisions can continue to outgrow their EV losses. Ford Pro, the commercial fleet business, has been the company's star performer, and the company is investing heavily in connected services and software for commercial customers. Ford Blue, meanwhile, benefits from the enduring profitability of the F-150 and Bronco franchises. If the Novelis supply chain normalizes by mid-2026 as expected, and tariff policy doesn't deliver another late-quarter surprise, Ford has a credible path to hitting the upper end of its guidance range.