Ford Motor Company increased its forecast for tariff expenses to $3 billion in pretax profit impact because of U.S. duties on imported vehicles and steel and aluminum and parts. The company released its second-quarter earnings report which showed an $800 million impact from tariffs during this period.
The company’s stock price declined 3% in evening trading after the company stated that U.S. duties on Mexican and Canadian and Asian goods would persist beyond expectations. CFO Sherry House explained that the company faces ongoing high costs for aluminum and steel materials together with supply chain problems from Chinese component suppliers.
The domestic production of 80% of its U.S. sales provides Ford with better protection against market changes. Still, it faces margin pressure. The company reported second-quarter earnings per share (EPS) at 37 cents which represented a 21% decrease from the previous year but exceeded market predictions. The company reported negative net income of $36 million because of a $570 million recall and canceled electric vehicle plans.
The company adjusted its EBIT forecast for the entire year to $6.5–$7.5 billion instead of its original projection. The market analysts praised strong gasoline and hybrid vehicle sales because of promotional efforts yet expressed concern about ongoing cost inflation that reduces profitability.
Ford continues to maintain daily discussions with the White House to seek protection against additional tariff-related losses.
