F-PC — Ford Motor Company 6% Notes due

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 when excluding a one-time $1.3 billion benefit from IEEPA tariffs.
• Adjusted Free Cash Flow: A use of $1.9 billion, attributed to timing differences and increased spending.
• Cash Position: $22 billion in cash and over $43 billion in liquidity.
• Dividend: Declared a regular dividend of $0.15 per share for Q2.

2. Strategic Updates and Business Highlights

• Ford+ Plan: Continued execution with a focus on integrating product creation and industrialization, enhancing software capabilities, and improving customer experience.
• Electric Vehicle (EV) Strategy: By 2030, 90% of global nameplates will offer electrified powertrains. The universal EV platform is set to launch in 2027.
• Ford Pro: Achieved EBIT of $1.7 billion, driven by a strong ecosystem of vehicles, software, and services. Paid software subscriptions grew 30% year-over-year to 879,000.
• Product Pipeline: Plans to refresh 80% of the North American portfolio and 70% globally by 2029, including next-generation F-150 and Super Duty models.
• Quality Improvement: Ranked #4 in the 2026 U.S. Customer Service Index, the best performance in 30 years.

3. Forward Guidance and Outlook

• Adjusted EBIT Guidance: Raised to $8.5 billion to $10.5 billion for the full year.
• Adjusted Free Cash Flow: Expected to be $5 billion to $6 billion.
• Capital Expenditures: Forecasted at $9.5 billion to $10.5 billion, with $1.5 billion allocated for Ford Energy.
• Segment Outlook:
  • Ford Pro EBIT: $6.5 billion to $7.5 billion.
  • Model e losses: $4 billion to $4.5 billion.
  • Ford Credit EBT: Approximately $2.5 billion.
  • Ford Blue EBIT: Increased guidance to $4.5 billion to $5 billion.

4. Bad News, Challenges, or Points of Concern

• Commodity Costs: Anticipated headwinds of over $2 billion due to rising aluminum prices and ongoing tariffs, which are expected to impact margins.
• Free Cash Flow: The significant cash burn in Q1 was attributed to higher working capital needs and increased spending on future investments.
• Market Risks: Guidance does not account for potential impacts from geopolitical tensions, particularly in the Middle East, or a downturn in the U.S. economy.
• Model e Losses: Continued losses in the Model e segment, although improvements are expected as the portfolio evolves.

5. Notable Q&A Insights

• Commodity Pricing: CFO Sherry House addressed concerns about rising commodity costs, emphasizing the volatility and the challenges posed by global shortages.
• Novelis Recovery: Kumar Galhotra confirmed that the Novelis mill is on track to restart in May, with contingency plans in place to mitigate disruptions.
• Truck Market Strategy: Discussion on the growing off-road performance trims, which now account for 25% of sales, indicating a strategic focus on higher-margin products.
• Partnerships and Global Strategy: CEO Jim Farley highlighted Ford's commitment to safeguarding the U.S. auto industry while exploring global partnerships, including potential collaborations with Chinese OEMs.
• Ford Energy Business: Strong interest from existing B2B clients in the new Ford Energy business, with plans to start production in Q4 of next year.

This summary encapsulates the key elements from Ford's Q1 2026 earnings call, providing a balanced view of the company's performance, strategic direction, and challenges ahead.