F-PD — Ford Motor Company 6.500% 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 when 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.
• Cash Position: $22 billion in cash and over $43 billion in liquidity.
• Dividend: Declared a regular dividend of $0.15 per share for Q2 2026.

2. Strategic Updates and Business Highlights

• Ford+ Plan: The company is raising its full-year adjusted EBIT guidance to $8.5 billion - $10.5 billion, reflecting strong execution and momentum.
• Organizational Changes: Established an end-to-end organization for product creation and industrialization, aimed at enhancing decision-making and reducing complexity.
• 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, with a 30% year-over-year increase in paid software subscriptions to 879,000.
• Quality Improvements: Ranked #4 in J.D. Power's 2026 U.S. Customer Service Index, the best performance in 30 years.

3. Forward Guidance and Outlook

• Full-Year Guidance: Adjusted EBIT of $8.5 billion to $10.5 billion; adjusted free cash flow of $5 billion to $6 billion; capital expenditures of $9.5 billion to $10.5 billion.
• 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 now part of the run-rate costs.
• Free Cash Flow Burn: The $1.9 billion cash burn in Q1 is expected to reverse, but the timing of improvements remains uncertain.
• Market Risks: Guidance does not account for potential impacts from ongoing geopolitical conflicts or significant downturns in the U.S. economy.
• Model e Losses: Continued losses in the Model e segment, although improvements in Gen 1 losses were noted.

5. Notable Q&A Insights

• Commodity Management: CFO Sherry House emphasized the challenges in predicting commodity prices due to volatility and global shortages, particularly in aluminum and steel.
• Novelis Recovery: Kumar Galhotra confirmed that the Novelis hot mill is expected to restart in May, with contingency plans in place to mitigate any disruptions.
• Partnerships and Competition: CEO Jim Farley discussed Ford's commitment to safeguarding the U.S. auto industry while exploring global partnerships, including potential collaborations with Chinese OEMs.
• Electric Vehicle Market: There is optimism regarding the UEV platform's launch, with expectations for strong demand in the affordable EV segment.
• Defense and Supply Chain: Farley mentioned early discussions with the U.S. government on defense projects and Ford's role in onshoring critical minerals and semiconductors.

This summary encapsulates the key points from Ford's Q1 2026 earnings call, highlighting both the company's strengths and the challenges it faces moving forward.