Can Ford Be More Like GM?

"General Motors Co. ( releases quarterly earnings before Ford Motor Co. ( NYSE: GM) NYSE: F). This year, GM's results were spectacular and much better than expected. It increased its full-year guidance and said the effects of tariffs on sales had been only modest. Instead of a full year's tariff earnings hit of about $5 billion, management said it would be closer to $3.5 billion. GM says its full-year EBIT will be between $12 billion and $13 billion. Earlier in the year, it had put that at $10.0 billion to $12.5 billion."

"GM also said it would probably take another charge for its electric vehicle (EV) business. Sales are too slow to justify earlier unit sales forecasts. The write-off was disclosed a few days before earnings and totaled $1.6 billion. CEO Mary Barra wrote in her earnings letter, "With the evolving regulatory framework and the end of federal consumer incentives, it is now clear that near-term EV adoption will be lower than planned.""

"Ford has to show four things to demonstrate that it is keeping pace with GM. One is that it has flat revenue and a profit performance in line with its larger rival. Two, it must show that it is writing down the cost of what were once ambitious EV plans. The next is a forecast that is much better than the prior one it gave investors. Finally, it must report that the impact of tariffs on future earnings will be modest."

GM delivered much stronger-than-expected quarterly results, raised full-year EBIT guidance to $12–13 billion, and lowered its estimated tariff-related earnings hit from about $5 billion to roughly $3.5 billion. GM disclosed a $1.6 billion write-off for its EV business because slower sales no longer justified prior unit forecasts. Management noted that evolving regulations and the end of federal consumer incentives have reduced near-term EV adoption. GM’s report lifted its stock and pulled Ford shares higher, while Ford faces pressure to show comparable revenue and profit performance, adjust EV plans, improve forecasts, and contain tariff impacts while fixing persistent quality and warranty problems.

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