Ford mentioned guidance, warning that Trump's tariffs will require $1.5 billion
Nora Eckert and Nathan Gomes
DETOIL (Reuters) – Ford Motor suspended annual guidance on Monday, saying the tax would cost the company about $1.5 billion in adjusted earnings ahead of interest and taxes due to tariff uncertainty by U.S. President Donald Trump.
In February, the automaker in Dearborn, Michigan predicted earnings before interest, with taxes ranging from $7 billion to $8.5 billion.
Ford Chief Financial Officer Sherry House said the company is in line with the goals of the guidelines and does not include the consequences of tariffs.
“We focus on managing our control,” House said.
While competitors such as General Motors have recently provided updated guidance, Ford executives said they paused the company's outlook until they became more aware of the impact of retaliatory tariffs and how consumers react to price increases.
“When GM provides revision guidance, including tariffs, it is a bold move for them to withdraw guidance, although fair things are uncertain,” said David Whisto, an analyst at Morningstar Research.
Ford reported after the U.S. stock exchange that its stock fell about 2% in after-hours trading.
Ford's earnings per share fell to 14 cents in the first quarter, far exceeding LSEG analysts' 2 cents per share estimates, but down from 49 cents a year ago. Executives say improvements in cost and quality help Ford beat expectations.
Earlier this year, the automaker warned that first-quarter results will be affected by production disruptions associated with the launch of several factory products. Net income fell sharply to $471 million from $1.3 billion in the same period last year.
Ford's revenue fell 5% in the quarter to $40.7 billion, but is expected to be around $36 billion. As consumers are rushing to buy the benefits of vehicles, the returns are raised, and tariffs will lead to price increases. Ford is one of the few automakers that have gained incentives to gain market share during this purchase madness.
Ford said tariffs would add $2.5 billion in overall costs for the year, which was mainly related to the cost of importing vehicles from Mexico and China. The automaker suspended car exports to China but still imported vehicles such as Lincoln Nautilus from the country.
Ford said it has been able to reduce costs by about $1 billion through various actions, including the use of bond carriers to transport vehicles from Mexico to Canada, so they are not subject to U.S. tariffs.
According to some estimates, Trump's 25% tariff on auto imports is expected to add $100 billion to U.S. automakers this year.
