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Ford Q3 Earnings Beat on Ford Credit Strength & Favorable Mix
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Key Takeaways
Ford's Q3 adjusted EPS rose 8.9% to 49 cents, beating estimates by 25.64%, despite a 2% revenue decline.
Favorable product mix and a 27% rise in Ford Credit pretax earnings supported quarterly results.
Ford raised its 2026 adjusted EBIT outlook to $10.5-$11 billion despite rising commodity cost pressures.
Ford Motor (F - Free Report) reported third-quarter 2026 adjusted earnings of 49 cents per share, beating the Zacks Consensus Estimate of 39 cents by 25.64%. Earnings increased 8.9% from 45 cents in the year-ago quarter, supported by favorable product mix and stronger Ford Credit results.
Automotive revenues, excluding Ford Credit, totaled $46.08 billion, down 2.3% year over year but surpassed the Zacks Consensus Estimate of $45.67 billion by 0.9%.
Consolidated revenues declined 2% to $49.5 billion. Global wholesale volumes fell 9% to 1.05 million units, reflecting product discontinuations and supply-related constraints.
Ford Motor Company Price, Consensus and EPS Surprise
Ford generated adjusted earnings before interest and taxes (EBIT) of $2.7 billion, up 3% year over year. Adjusted EBIT margin expanded 30 basis points to 5.4%, reflecting improved operating efficiency despite lower revenues.
Ford Blue Faces Volume and Commodity Pressures
Ford Blue revenues declined 3% year over year to $27.1 billion as wholesale volumes fell 10% to 657,000 units. Lower sales reflected discontinued models and disruptions associated with the Middle East conflict. Favorable product mix provided a partial offset.
Segment EBIT decreased 10% to $1.39 billion, while EBIT margin contracted to 5.1% from 5.5%. Higher commodity costs also weighed on profitability.
Demand for higher-margin vehicles remained encouraging. Explorer's Tremor and Platinum trims registered nearly 60% year-to-date sales growth in the United States. F-Series achieved the highest retail share among full-size truck brands during the quarter.
F's Model e Loss Narrows Amid EV Restructuring
Ford Model e revenues declined 31% to $1.2 billion, with wholesale volumes falling 31% to 34,000 units. The decline reflected the discontinuation of F-150 Lightning and production adjustments for Mustang Mach-E.
The segment reported an EBIT loss of $1.06 billion, narrowing from $1.41 billion a year earlier. However, its EBIT margin deteriorated to negative 86.5% from negative 79.1%, reflecting reduced revenues and continued investments in next-generation products.
Management expects to launch the affordable electric vehicle, Fathom, in the fourth quarter of 2027, with a starting price below $30,000. Ford Energy also remains on track to establish 20 gigawatt-hours of annual battery capacity by the end of 2027.
Ford Pro Sees Higher Sales but Weaker Margins
Ford Pro revenues increased 2% year over year to $17.8 billion despite a 4% decline in wholesale volumes to 358,000 units. Favorable product mix, supported by increased truck production, helped offset weaker volumes.
Segment EBIT declined 16% to $1.67 billion, while the EBIT margin contracted to 9.4% from 11.4%. Higher commodity costs, temporary aluminum sourcing expenses and launch costs associated with Super Duty production at Oakville pressured profitability.
The Oakville production ramp exceeded planned daily volume and labor productivity targets. Management also highlighted continued expansion in software services and parts, which together represented approximately 10% of consolidated quarterly revenues.
Ford Credit Business Delivers Strong Earnings Growth
Ford Credit generated earnings before taxes of $803 million, which increased 27% year over year. Favorable derivative valuations, higher receivables and a supportive used-vehicle pricing environment contributed to the improvement.
However, U.S. retail loss-to-receivables increased to 0.67% from 0.61% a year earlier, reflecting higher credit loss severity. Used-vehicle auction values declined 3% amid increasing supply.
Cash Flow Strength Supports Capital Returns
Ford generated $5.4 billion in operating cash flow during the quarter, compared with $7.4 billion a year ago. Adjusted free cash flow improved to $4.7 billion from $4.3 billion.
The company ended September with $25.3 billion in cash and $46.4 billion in liquidity. Capital spending totaled $2.3 billion during the quarter. Ford declared a regular quarterly dividend of 15 cents per share, payable Dec. 1 to shareholders of record on Nov. 10.
2026 Earnings Outlook
Ford raised the lower end of its full-year adjusted EBIT guidance to $10.5-$11 billion from $10-$11 billion. Adjusted free cash flow guidance remained unchanged at $6-$7 billion, while capital spending is expected to be between $9.5 billion and $10.5 billion.
For 2026, management anticipates Ford Blue EBIT of approximately $5.5 billion and Ford Pro EBIT of about $7 billion. Model e is expected to incur losses of approximately $4 billion, while Ford Credit is projected to generate pretax earnings of roughly $2.8 billion.
Ford now expects commodity-related headwinds approaching $2.5 billion, up from slightly more than $2 billion previously. Management also expects U.S. industry pricing to increase approximately 1% year over year and maintains its longer-term target of an 8% adjusted EBIT margin by 2029.
The company remains on track to deliver $1 billion in material and warranty cost reductions in 2026, excluding tariffs and Novelis-related costs.
Other Key Releases From the Auto Space
Genuine Parts Company (GPC - Free Report) reported third-quarter 2026 adjusted earnings of $2.07 per share, which missed the Zacks Consensus Estimate of $2.09. The bottom line increased 4.5% from $1.98 in the year-ago quarter. Revenues rose 4.2% year over year to $6.52 billion and surpassed the consensus estimate of $6.5 billion. Comparable sales increased 2.9%, led by strong Industrial demand. Genuine Parts ended September with $2.4 billion of liquidity, including $763 million in cash.
General Motors (GM - Free Report) delivered strong third-quarter 2026 results yesterday. Its earnings per share grew 32.2% year over year to $3.70 and topped the Zacks Consensus Estimate of $3.55. Revenues of $50.02 billion increased 3% year over year and outpaced the consensus mark of $48.21 billion. On a further encouraging note, General Motors raised its adjusted automotive free cash flow forecast to $11.5-$12.5 billion from $9.5-$11.5 billion and authorized a $20-billion multi-year share repurchase program.
Tesla (TSLA - Free Report) reported third-quarter 2026 adjusted earnings of 48 cents per share, which beat the Zacks Consensus Estimate of 45 cents by 6.67%. However, earnings declined 4% from 50 cents in the year-ago quarter, reflecting higher operating expenses. Tesla’s revenues totaled $28.05 billion, down marginally from $28.1 billion a year ago. The metric surpassed the Zacks Consensus Estimate of $27.78 billion by 0.96%. Tesla has trimmed its 2026 capital expenditure outlook to approximately $20 billion from $25 billion guided earlier.
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Ford Q3 Earnings Beat on Ford Credit Strength & Favorable Mix
Key Takeaways
Ford Motor (F - Free Report) reported third-quarter 2026 adjusted earnings of 49 cents per share, beating the Zacks Consensus Estimate of 39 cents by 25.64%. Earnings increased 8.9% from 45 cents in the year-ago quarter, supported by favorable product mix and stronger Ford Credit results.
Automotive revenues, excluding Ford Credit, totaled $46.08 billion, down 2.3% year over year but surpassed the Zacks Consensus Estimate of $45.67 billion by 0.9%.
Consolidated revenues declined 2% to $49.5 billion. Global wholesale volumes fell 9% to 1.05 million units, reflecting product discontinuations and supply-related constraints.
Ford Motor Company Price, Consensus and EPS Surprise
Ford Motor Company price-consensus-eps-surprise-chart | Ford Motor Company Quote
Ford currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ford generated adjusted earnings before interest and taxes (EBIT) of $2.7 billion, up 3% year over year. Adjusted EBIT margin expanded 30 basis points to 5.4%, reflecting improved operating efficiency despite lower revenues.
Ford Blue Faces Volume and Commodity Pressures
Ford Blue revenues declined 3% year over year to $27.1 billion as wholesale volumes fell 10% to 657,000 units. Lower sales reflected discontinued models and disruptions associated with the Middle East conflict. Favorable product mix provided a partial offset.
Segment EBIT decreased 10% to $1.39 billion, while EBIT margin contracted to 5.1% from 5.5%. Higher commodity costs also weighed on profitability.
Demand for higher-margin vehicles remained encouraging. Explorer's Tremor and Platinum trims registered nearly 60% year-to-date sales growth in the United States. F-Series achieved the highest retail share among full-size truck brands during the quarter.
F's Model e Loss Narrows Amid EV Restructuring
Ford Model e revenues declined 31% to $1.2 billion, with wholesale volumes falling 31% to 34,000 units. The decline reflected the discontinuation of F-150 Lightning and production adjustments for Mustang Mach-E.
The segment reported an EBIT loss of $1.06 billion, narrowing from $1.41 billion a year earlier. However, its EBIT margin deteriorated to negative 86.5% from negative 79.1%, reflecting reduced revenues and continued investments in next-generation products.
Management expects to launch the affordable electric vehicle, Fathom, in the fourth quarter of 2027, with a starting price below $30,000. Ford Energy also remains on track to establish 20 gigawatt-hours of annual battery capacity by the end of 2027.
Ford Pro Sees Higher Sales but Weaker Margins
Ford Pro revenues increased 2% year over year to $17.8 billion despite a 4% decline in wholesale volumes to 358,000 units. Favorable product mix, supported by increased truck production, helped offset weaker volumes.
Segment EBIT declined 16% to $1.67 billion, while the EBIT margin contracted to 9.4% from 11.4%. Higher commodity costs, temporary aluminum sourcing expenses and launch costs associated with Super Duty production at Oakville pressured profitability.
The Oakville production ramp exceeded planned daily volume and labor productivity targets. Management also highlighted continued expansion in software services and parts, which together represented approximately 10% of consolidated quarterly revenues.
Ford Credit Business Delivers Strong Earnings Growth
Ford Credit generated earnings before taxes of $803 million, which increased 27% year over year. Favorable derivative valuations, higher receivables and a supportive used-vehicle pricing environment contributed to the improvement.
However, U.S. retail loss-to-receivables increased to 0.67% from 0.61% a year earlier, reflecting higher credit loss severity. Used-vehicle auction values declined 3% amid increasing supply.
Cash Flow Strength Supports Capital Returns
Ford generated $5.4 billion in operating cash flow during the quarter, compared with $7.4 billion a year ago. Adjusted free cash flow improved to $4.7 billion from $4.3 billion.
The company ended September with $25.3 billion in cash and $46.4 billion in liquidity. Capital spending totaled $2.3 billion during the quarter. Ford declared a regular quarterly dividend of 15 cents per share, payable Dec. 1 to shareholders of record on Nov. 10.
2026 Earnings Outlook
Ford raised the lower end of its full-year adjusted EBIT guidance to $10.5-$11 billion from $10-$11 billion. Adjusted free cash flow guidance remained unchanged at $6-$7 billion, while capital spending is expected to be between $9.5 billion and $10.5 billion.
For 2026, management anticipates Ford Blue EBIT of approximately $5.5 billion and Ford Pro EBIT of about $7 billion. Model e is expected to incur losses of approximately $4 billion, while Ford Credit is projected to generate pretax earnings of roughly $2.8 billion.
Ford now expects commodity-related headwinds approaching $2.5 billion, up from slightly more than $2 billion previously. Management also expects U.S. industry pricing to increase approximately 1% year over year and maintains its longer-term target of an 8% adjusted EBIT margin by 2029.
The company remains on track to deliver $1 billion in material and warranty cost reductions in 2026, excluding tariffs and Novelis-related costs.
Other Key Releases From the Auto Space
Genuine Parts Company (GPC - Free Report) reported third-quarter 2026 adjusted earnings of $2.07 per share, which missed the Zacks Consensus Estimate of $2.09. The bottom line increased 4.5% from $1.98 in the year-ago quarter. Revenues rose 4.2% year over year to $6.52 billion and surpassed the consensus estimate of $6.5 billion. Comparable sales increased 2.9%, led by strong Industrial demand. Genuine Parts ended September with $2.4 billion of liquidity, including $763 million in cash.
General Motors (GM - Free Report) delivered strong third-quarter 2026 results yesterday. Its earnings per share grew 32.2% year over year to $3.70 and topped the Zacks Consensus Estimate of $3.55. Revenues of $50.02 billion increased 3% year over year and outpaced the consensus mark of $48.21 billion. On a further encouraging note, General Motors raised its adjusted automotive free cash flow forecast to $11.5-$12.5 billion from $9.5-$11.5 billion and authorized a $20-billion multi-year share repurchase program.
Tesla (TSLA - Free Report) reported third-quarter 2026 adjusted earnings of 48 cents per share, which beat the Zacks Consensus Estimate of 45 cents by 6.67%. However, earnings declined 4% from 50 cents in the year-ago quarter, reflecting higher operating expenses. Tesla’s revenues totaled $28.05 billion, down marginally from $28.1 billion a year ago. The metric surpassed the Zacks Consensus Estimate of $27.78 billion by 0.96%. Tesla has trimmed its 2026 capital expenditure outlook to approximately $20 billion from $25 billion guided earlier.