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FM

FORD MOTOR CO (F)·Q4 2024 Earnings Summary

Executive Summary

  • Solid quarter on the top line, mixed on profitability: Q4 revenue rose 5% YoY to $48.2B; GAAP EPS was $0.45 and adjusted EPS $0.39, as adjusted EBIT margin dipped to 4.4% (vs. 5.5% in Q3) on mix and continued EV pressure .
  • 2025 guidance reset lower vs. 2024 actuals: Company guides adjusted EBIT of $7.0–$8.5B and adjusted FCF of $3.5–$4.5B, with Q1 2025 roughly breakeven and savings back-half weighted; capex $8–$9B .
  • Pro remains the structural profit anchor; Model e remains a drag: Q4 Ford Pro EBIT $1.63B (10.0% margin) while Model e lost $1.39B (–98.1% margin); Blue posted $1.58B EBIT (5.8% margin) .
  • Capital returns: Declared both a regular $0.15 and a supplemental $0.15 dividend payable Mar 3, 2025; year-end cash >$28B and total liquidity ~ $47B underpin flexibility .
  • Stock catalysts: Near-term, “breakeven” Q1 setup and 2% industry price moderation could weigh; medium-term, execution on >$1B 2025 cost reductions and Pro services/software mix shift (toward 20% of Pro EBIT) are key deriskers .

What Went Well and What Went Wrong

What Went Well

  • Pro resilience and services mix: Pro generated $1.63B EBIT in Q4 (10.0% margin), and services comprised ~13% of Pro profitability in Q4; management targets 20% by 2026, highlighting 35–60% margins on repair/software attach .
  • Record top-line and strong cash/liquidity: Q4 revenue grew to $48.2B; FY24 revenue a record $185B; Ford ended ’24 with >$28B cash and ~ $47B liquidity, supporting regular and supplemental dividends .
  • Cost discipline framework and pipeline: Management cites >$1B net cost reductions targeted for 2025 (material and warranty), with ~90% of product design cost actions identified and savings back-half weighted .
    • Quote: “We already have over $1 billion of product design cost reduction ideas to be implemented this year.” – Jim Farley .

What Went Wrong

  • Profitability mix and EV headwinds: Company adjusted EBIT margin fell sequentially (4.4% vs. 5.5% in Q3); Model e posted a $1.39B Q4 loss (–98.1% margin), reflecting ongoing industry pricing pressure despite $1.4B of 2024 cost improvements .
  • 2025 guide below 2024: Adjusted EBIT outlook of $7.0–$8.5B vs. FY24 adjusted EBIT $10.2B; Q1 2025 expected “roughly breakeven” due to lower wholesales, mix and launch activity .
  • Pricing/macro risks called out: Management assumes ~2% industry price moderation in 2025, sees pricing pressure in fleet/rental within Pro, and flagged tariff/policy risk despite near-term operational buffers .

Financial Results

Headline P&L – sequential trend and YoY (company total)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($B)$47.8 $46.2 $48.2
GAAP Diluted EPS ($)$0.46 $0.22 $0.45
Adjusted EPS ($)$0.47 $0.49 $0.39
Adjusted EBIT ($B)$2.8 $2.6 $2.1
Adjusted EBIT Margin (%)5.8% 5.5% 4.4%
Net Income ($B)$1.8 $0.9 $1.8
Net Income Margin (%)3.8% 1.9% 3.8%

Notes: Q4 non-GAAP adjustments bridged GAAP EPS $0.45 to adjusted $0.39 (special items pre-tax $0.47B in Q4) .

Segment Breakdown – Q4 2024

SegmentRevenue ($B)EBIT ($M)EBIT Margin (%)
Ford Blue$27.3 $1,581 5.8%
Ford Model e$1.4 $(1,389) (98.1%)
Ford Pro$16.2 $1,629 10.0%

KPIs and Operating Metrics

KPIQ2 2024Q3 2024Q4 / FY 2024
Ford Pro Intelligence paid software subscriptions (units)~610,000 nearly 630,000 nearly 650,000 (FY)
BlueCruise equipped vehicles (units)415,000 —just under 700,000
BlueCruise hands-free miles (cumulative)213M —300M
Pro mobile service vehicles (context)~2,000+ fleet; orders >2x YoY (Q2 context) ~2,400; repair orders +70% YoY Mobile service units +57% in 2024 (YoY)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBIT ($B)FY 2025n/a$7.0–$8.5 New
Adjusted Free Cash Flow ($B)FY 2025n/a$3.5–$4.5 New
Capital Expenditures ($B)FY 2025n/a$8–$9 New
Adjusted EBITQ1 2025n/aRoughly breakeven New
Ford Pro EBIT ($B)FY 2025n/a$7.5–$8.0 New
Ford Blue EBIT ($B)FY 2025n/a$3.5–$4.0 New
Ford Model e EBIT ($B)FY 2025n/a$(5.0)–$(5.5) New
Ford Credit EBT ($B)FY 2025n/a~ $2.0 New
DividendQ1 2025n/aRegular $0.15 + Supplemental $0.15 (payable Mar 3) Announced

Guidance color: Management assumes ~2% industry price moderation in 2025; >$1B net cost reductions targeted, with savings primarily in 2H; Q1 impacted by launch activity at Kentucky Truck and Michigan Assembly .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Cost reduction & warrantyQ2: Targeted $2B efficiencies; warranty reserves elevated . Q3: Leading indicators of quality improving; inventory normalized plan .>$1B 2025 net cost reductions (material/warranty), ~90% pipeline identified; back-half weighted .Execution-critical; back-half 2025 ramp
EV strategy & economicsQ2: Shift to affordable, smaller EVs; CATL LFP, “skunkworks” platform; compliance/credits . Q3: Cost downs on Gen1; EU launches; PTC benefit mid-’25+ .Model e losses to be held flat YoY despite volume gains; ~$1B extra 2025 spend (BOSK battery + Gen2); hybrids/EREVs emphasized for large vehicles use-cases .Pivot to mix of EV/EREV/hybrid; Model e loss containment
Ford Pro & servicesQ2: Paid subs ~610k; services/software growing high-margin revenue . Q3: Paid subs ~630k; services ~13% of Pro profitability .Services ~13% of Pro EBIT in Q4; target to 20%; monitor fleet/rental pricing pressure .Sticky attach up; watch pricing in fleet
Pricing & inventoryQ3: Pricing pressure risks in 2025; inventories to 50–60 days target .Planning ~2% industry price moderation; first-half inventory reductions (Q1–Q2); watch competitor incentives .Moderating; discipline emphasized
Tariffs/policy—Near-term absorption possible for “weeks”; sustained 25% tariffs would be industry negative; urge comprehensive policy .Policy risk elevated
ADAS/AIQ2: OTA leadership; software stack breadth; paid subs growth .Level 3 on highway “around the corner”; BlueCruise units ~700k; consider partnerships for L4 personal autonomy .Advancing; potential partnering

Management Commentary

  • “We finished 2024 with a solid fourth quarter, capping the highest revenue year in Ford’s history… Ford Pro, with its mid-teen margins… provides unique advantages for continued growth.” – Jim Farley, CEO .
  • “We expect to make significantly more progress on… quality and cost… we control those key profit drivers.” – Jim Farley .
  • “We delivered $10.2B in adjusted EBIT… adjusted free cash flow was $6.7B… balance sheet is strong with more than $28B in cash and close to $47B in liquidity.” – Sherry House, CFO .
  • 2025 setup: “Adjusted EBIT of $7–$8.5B… adjusted FCF of $3.5–$4.5B… capex of $8–$9B… Q1 adjusted EBIT roughly breakeven… savings primarily second half.” – Sherry House .
  • EV focus: “Next-gen vehicles… affordable, high volume… larger retail EV utilities are a tough business case; commercial EVs show potential.” – Jim Farley .

Q&A Highlights

  • Calendarization and inventory: Q1 EBIT breakeven driven by lower wholesales, non-repeat of stock build, adverse FX; gross units down ~5% in January with further reductions planned in H1 to mid-50 days supply .
  • Model e bridge: Losses held flat YoY despite higher volume given ~$1B incremental 2025 costs (BOSK battery JV + Gen2 engineering); pricing pressure persists but Mach-E ended Q4 with >30% QoQ sales .
  • Tariffs: Able to absorb “weeks” via stock/mix maneuvers; sustained 25% tariffs would be “devastating” to industry profits without comprehensive coverage across imports .
  • Pricing: Management assumes ~2% industry price moderation; highlights competitive incentive actions in pickups and the need for inventory discipline to protect brand/pricing .
  • Cost plan detail: Focused on material cost and warranty; ~90% of product design cost pipeline identified; savings back-half loaded .

Estimates Context

  • Q4 2024 S&P Global (Capital IQ) consensus for revenue and EPS was unavailable via our data connection at this time; as a result, explicit “vs. consensus” comparisons are not included. We will update when access resumes.
    • Note: Ford reported Q4 revenue of $48.2B, GAAP EPS $0.45, adjusted EPS $0.39 and adjusted EBIT of $2.1B .

Key Takeaways for Investors

  • Near-term: 2025 guide (EBIT $7.0–$8.5B) and Q1 breakeven set a softer start; expect H2-driven earnings cadence if >$1B cost reductions and launch transitions track to plan .
  • Mix and pricing: Company embeds ~2% industry price moderation; watch fleet/rental pricing in Pro and pickup incentives across competitors; inventory discipline is central to defending margins .
  • Structural anchors: Pro remains the earnings ballast with double-digit margins and rising services/software attach (aiming to 20% of Pro EBIT), providing cyclicality dampening and multiple expansion potential over time .
  • EV journey: Model e losses remain sizable but controlled; strategy pivots toward affordable EVs and partial electrification (hybrids/EREVs) for large vehicles—monitor BOSK/PTC tailwinds and Gen2 timing .
  • Capital returns and balance sheet: Regular and supplemental dividends supported by >$28B cash and ~$47B liquidity; optionality preserved for strategic services/tech investments .
  • Risk watchlist: Policy/tariffs, industry pricing normalization, warranty trajectory, and FX (Argentina, Brazil, Turkey) can swing the P&L path; management is leaning into what it controls—cost and quality .