F-PB — Ford Motor Company 6.20% Notes

Summary of Ford Motor Company's Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Revenue: $43.3 billion, up over 6% year-over-year.
• Adjusted EBIT: $3.5 billion; $2.2 billion excluding a $1.3 billion benefit from IEEPA tariffs.
• Adjusted Free Cash Flow: A use of $1.9 billion, attributed to unfavorable timing differences and increased spending.
• Liquidity: $22 billion in cash and over $43 billion in total liquidity.
• Dividend Declared: $0.15 per share for Q2, payable on June 1.

2. Strategic Updates and Business Highlights:

• Ford is raising its full-year adjusted EBIT guidance to $8.5 billion - $10.5 billion.
• The company is focusing on its Ford+ plan, emphasizing a unified organization for product creation and industrialization to enhance decision-making and reduce complexity.
• Significant investment in software and physical services, with expectations of nearly 8% annual growth from a $15 billion revenue base.
• Aggressive product pipeline: 80% of North America and 70% of global portfolio to be refreshed by 2029, including a new universal EV platform launching in 2027.
• Ford Pro achieved $1.7 billion in EBIT, driven by strong margins and a 30% increase in paid software subscriptions.

3. Forward Guidance and Outlook:

• Full-year adjusted EBIT guidance increased by $500 million due to stronger underlying business performance.
• Segment outlook includes:
  • Ford Pro EBIT: $6.5 billion - $7.5 billion.
  • Model e losses: $4 billion - $4.5 billion.
  • Ford Credit EBT: approximately $2.5 billion.
  • Ford Blue EBIT: $4.5 billion - $5 billion, reflecting improved sales performance.
• Anticipated challenges include commodity headwinds exceeding $2 billion and ongoing tariff impacts.

4. Bad News, Challenges, or Points of Concern:

• Commodity costs are expected to rise, with a $2 billion headwind anticipated, primarily due to aluminum pricing pressures.
• The impact of the IEEPA tariff benefit will not repeat in future quarters, affecting profitability.
• Concerns regarding the ongoing conflict in the Middle East and its potential impact on supply chains and industry demand.
• Model e continues to face losses, although improvements are noted in Gen 1 performance.

5. Notable Q&A Insights:

• The company is confident in the Novelis recovery timeline, expecting the hot mill to restart in May, with contingency plans in place.
• There is a focus on maintaining a competitive edge in the pickup market, with plans to offer diverse powertrains and capitalize on growing demand.
• Ford is actively exploring partnerships and leveraging relationships with Chinese OEMs while emphasizing the importance of safeguarding the U.S. auto industry.
• The company is committed to its Ford Energy business, with proactive outreach to existing B2B customers indicating strong interest.
• Discussions around potential defense contracts with the U.S. government are ongoing, highlighting Ford's commitment to supporting national interests.

Overall, Ford's Q1 2026 results reflect a strong start to the year, driven by strategic initiatives and operational improvements, though challenges related to commodity costs and geopolitical risks remain significant concerns.