Ford Motor Co.'s net income fell roughly 64% year-over-year in the first three months of the year to $471 million, and the Dearborn automaker suspended its annual guidance because of tariff-related uncertainty.

The company had forecasted a flat first quarter because of production downtime at its Kentucky Truck Plant for retooling to accommodate the recently launched fifth-generation Expedition SUV as well as at Michigan Assembly Plant in Wayne. Back in February, however, the picture of frequently fluctuating on-again, off-again tariffs wasn't quite complete. Now, with President Donald Trump's 25% tariffs on imported vehicles and certain auto parts being collected, Ford is projecting they'll hurt adjusted operating profit by about $1.5 billion for 2025.

The exposure, however, is closer to $2.5 billion. CEO Jim Farley told Fox Business last week that a 25% duty on the parts it imports into the country "could basically wipe out half our global profit." Ford in 2024 made $5.9 billion in net income and $10.2 billion adjusted operating profit. The list of parts subject to the tariff includes more than 100 categories ranging from engines and steering wheels to hinges and more, but parts compliant with the United States-Mexico-Canada trade agreement that Trump signed in 2020 are exempt for now. Eighty percent of the parts Ford imports for U.S.-assembled vehicles are USMCA compliant.

“We are strengthening our underlying business with significantly better quality," Farley said in a statement, "and our third straight quarter of year-over-year cost improvement, excluding the impact of tariffs."

For the first quarter, roughly $200 million was the net effect of tariffs, with Ford offsetting about 35% of the costs by using bonded trucking for parts and vehicles traveling through the United States to get from Mexico to Canada, stopping shipments to China that has placed retaliatory duties on the U.S. exports and making some adjustments to production of the Lincoln Nautilus in China, Chief Financial Officer Sherry House said.

The Dearborn, Michigan, automaker in the first quarter recorded a $1 billion adjusted operating profit, a 1.2% margin, on revenue of $40.7 billion, which was down 4.9% from a year ago. Although the operating profit fell 64% from inventory destocking efforts and retooling, and margin was down from 3.1%, Ford's result surpassed average analyst predictions, according to Yahoo Finance.

Analysts were expecting revenue of $35.79 billion and earnings of 2 cents per share. Ford recorded adjusted earnings per share of 14 cents for the quarter.

Ford in February provided guidance for an adjusted operating profit of $7 billion to $8.5 billion. That would've been a 17% to 31% decrease from 2024. The company said excluding tariff costs, its results were tracking within that forecast, and it'll provide an update on its second-quarter earnings call.

In the January-through-March quarter, Ford Blue, the company's internal combustion engine and hybrid vehicle business, posted operating income down 89% to $96 million from retooling and inventory rebalancing and a 0.5% operating margin compared to 4.2% a year ago. The automaker had expected $3.5 billion to $4 billion in operating earnings from Ford Blue in 2025.

Retooling at Kentucky Truck, which produces the cash-cow Super Duty pickups, also contributed to Ford Pro, the commercial vehicle business, reporting $1.309 billion in operating income, down 56% year-over-year, and a 8.6% operating margin compared to 16.7% a year ago. Ford had predicted $9 billion in annual earnings from the division.

Farley last week described Kentucky Truck's revenue as being more than that produced by Southwest Airlines Co., whose operating revenues were $27.5 billion in 2024.

And the loss posted by Ford Model e, the business unit dedicated to electric vehicles, was $849 million compared to $1.32 billion in the first quarter of 2024 from improved EV sales. The company had expected another $5 billion to $5.5 billion loss from Model e in 2025.

Ford also continues to address its cost structure, quality and warranty expenses, House said. The company is on track for $1 billion in operating profit savings from those measures.

Adjusted free cash flow was $1.5 billion. At the end of the quarter, Ford had $27 billion in cash and $45 billion in liquidity.

Beating expectations last week, crosstown rival General Motors Co. made $2.853 billion in net income on revenue of $44.02 billion, and the Detroit automaker called its annual earnings guidance unreliable because of tariffs before reducing it. Stellantis NV's first-quarter revenues declined year-over-year to $40.7 billion, and the automaker won't report net income until the end of the first half of the year. It, too, suspended its annual earnings guidance because of changing trade policies.

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