A Tale of Two Reports

Ford Motor Company delivered a brutal fourth-quarter earnings miss—adjusted earnings per share of $0.13 versus $0.19 expected—and reported a staggering $11.1 billion net loss for the quarter, weighed down by massive EV writedowns and a crippling aluminum plant fire . Yet investors pushed the stock up nearly 2% in after-hours trading, betting on CEO Jim Farley's promise that 2026 will be a "stronger year" . Here's what happened and why Wall Street is cautiously optimistic.

$0.13
Q4 EPS (vs $0.19 est)
$1.0B
Q4 Core Profit (-50%)
$45.9B
Q4 Revenue (+beat)

The Earnings Disaster in Detail

Ford's fourth-quarter core profit tumbled about 50% to $1 billion, hammered by higher-than-expected costs from a catastrophic fire at a Novelis aluminum supplier plant in New York, which disrupted production of the highly profitable F-150 trucks .

The company reported a net loss of $11.1 billion for the quarter, largely driven by substantial, previously disclosed writedowns on its EV programs . For the full year, Ford recorded an $8.2 billion net loss after accounting for special items, marking its worst annual performance since the 2008 financial crisis .

Analyst miss: This was Ford's largest quarterly earnings miss since Q4 2021, with EPS coming in 32% below consensus expectations .

The Tariff and Aluminum Nightmare

Two major external shocks compounded Ford's pain:

  • Aluminum plant fire: The Novelis facility near Oswego, New York, which supplies aluminum for Ford's F-150 trucks, suffered two major fires and won't be fully operational until mid-2026, weighing on results far longer than expected .
  • Trump tariffs: Ford projects about $2 billion in costs for 2026 from President Donald Trump's tariffs, much of it tied to aluminum sourcing . A late-December change in tariff relief rules added an unexpected $900 million in costs, causing Ford to miss its full-year profit guidance .

CFO Sherry House explained that the company's profit guidance was reduced from $7.7 billion to $6.8 billion after the administration's updated guidance on imported auto parts credits .

CEO Farley's 2026 Promise: $8B-$10B EBIT

Despite the grim quarterly results, Ford projected adjusted earnings before interest and taxes (EBIT) of $8 billion to $10 billion for 2026, within the mean analyst expectation of $8.78 billion . The company also forecast adjusted free cash flow of $5 billion to $6 billion and capital spending of $9.5 billion to $10.5 billion .

"I do believe this is the right allocation of capital. It's a combination of partnerships where it makes sense, efficient partial electrification investments where we have revenue power, and really hitting the EV market in the core." — Jim Farley, Ford CEO

Farley emphasized that Ford's "Ford+" strategy—dividing operations into Ford Blue (ICE/hybrid), Ford Pro (commercial), and Ford Model e (EV)—is now in its third year, with Ford Pro expected to generate roughly 60% of Ford's projected profit this year .

Segment Breakdown: Where the Money Is

Ford Pro (Commercial)

The crown jewel. Expected to deliver $65-$75 billion in revenue with high-margin software services (over 818,000 paid subscriptions) .

Ford Blue (Traditional ICE/Hybrid)

The cash cow. F-150, Bronco, and Mustang continue funding the transition. Hybrid sales jumped 21.7% in 2025 .

Ford Model e (EV)

The money pit. Lost $4.8 billion in 2025 and projects another $4-$4.5 billion loss in 2026 . But the new "skunkworks" team in California is developing a $30,000 EV platform, with an electric pickup due in 2027 .

The BYD Shock: Losing the Global Sales Crown

For the first time, Ford has been overtaken by a Chinese automaker. BYD's global sales reached 4.6 million vehicles in 2025, surpassing Ford's 4.4 million, pushing BYD to 6th place globally .

Farley has publicly identified BYD as Ford's "existential threat," noting that Chinese automakers bring cars to market in half the time it takes Ford .

Stock Performance: A Tale of Two Rivals

+47%
Ford 1-year stock
+72%
GM 1-year stock
-42%
Stellantis 1-year stock

Despite the earnings miss, Ford shares have risen 47% over the past year to roughly $14 . General Motors shares soared 72% in the same period, consistently beating expectations, while Stellantis plunged 42% .

Industry Context: Everyone's Bleeding from EV Writedowns

Ford isn't alone in its EV misery. The industry is seeing massive writedowns as EV demand cools:

  • Ford: $19.5 billion in EV-related writedowns announced December 2025
  • GM: $7.6 billion in charges related to EV production changes
  • Stellantis: $26.5 billion in charges across its global lineup

The elimination of the $7,500 federal EV tax credit has further dampened demand, complicating Ford's path to EV profitability .

Strategic Pivot: Hybrid Bridge, Software Future

Ford is shifting from the "all-EV, all-the-time" narrative to a "hybrid-first" approach . The company is capitalizing on strong consumer demand for hybrids—the Maverick Hybrid has become one of the most sought-after vehicles in the U.S. .

Simultaneously, Ford is betting big on software. Through Ford Pro, the company has surpassed 818,000 paid software subscriptions, offering fleet owners real-time data on driver behavior and predictive maintenance . Farley pointed to John Deere as Ford's role model—a hardware company that transformed into a technology services company, now worth $108 billion, roughly twice Ford's valuation .

"Auto companies have been stuck in a valuation box. You're not going to start believing us until we deliver. We've told you this before and we haven't delivered." — John Lawler, CFO, addressing analyst skepticism

What's Coming: New Products and Partnerships

  • 2027: All-new electric pickup on the $30,000 EV platform, designed by the California "skunkworks" team
  • Partnerships: Ford and Renault partnering in Europe to produce EVs; Geely in talks for production and technology partnership
  • Cost reduction: Ford aims to eliminate a $7 billion cost gap to competitors through engineering transformation and up to 30% labor cost reduction per vehicle

Key Timeline

Sept 2025
Novelis aluminum plant fire disrupts F-150 production
Dec 2025
Ford announces $19.5B EV writedown; Trump tariff relief change adds $900M cost
Q4 2025
Ford misses EPS forecast by 32%—worst miss since 2021
Feb 2026
Ford reports $11.1B Q4 net loss, projects $8B-$10B EBIT for 2026
2027
New low-cost electric pickup expected

Frequently Asked Questions

How badly did Ford miss earnings?
Ford reported Q4 adjusted EPS of $0.13, missing analyst forecasts of $0.19 per share—a 32% miss . Core profit fell 50% to $1 billion .
What caused Ford's massive $11.1 billion quarterly loss?
The loss was driven by $19.5 billion in EV program writedowns, $2 billion in annual tariff costs, and the Novelis aluminum plant fire disrupting F-150 production .
What is Ford's 2026 outlook?
Ford projects adjusted EBIT of $8 billion to $10 billion, adjusted free cash flow of $5-6 billion, and capital spending of $9.5-10.5 billion .
How much is Ford losing on EVs?
Ford's Model e unit lost $4.8 billion in 2025 and is projected to lose $4-4.5 billion in 2026 .
What is Ford's hybrid strategy?
Ford is pivoting to a "hybrid-first" approach, capitalizing on strong demand for models like the Maverick Hybrid. Hybrid sales jumped 21.7% in 2025 .
How did BYD overtake Ford?
BYD's global sales reached 4.6 million vehicles in 2025, surpassing Ford's 4.4 million, marking the first time a Chinese automaker outsold Ford .