Al Root

Ford Motor reports earnings Wednesday. While Tariffs, trade, quality, and demand are on the minds of investors, they will also care about the reported results.

It might not be easy to interpret the numbers, though. Wall Street estimates don't appear to have kept up with current events.

The Dearborn, Michigan-based auto maker is slated to report second-quarter earnings Wednesday evening. Wall Street is looking for an operating profit of $1.9 billion and earnings per share (EPS) of 33 cents from sales of $45.8 billion, according to FactSet. A year ago, in the second quarter of 2024, Ford reported operating profit of $2.8 billion and EPS of 47 cents from sales of $47.8 billion.

Tariff-related cost headwinds are partly responsible for the year-over-year decline in operating profit. Ford estimated a 2025 tariff impact of about $1.5 billion in its first-quarter earnings report in May.

Investors might have to brace for a headline earnings miss, but not because of tariffs. In mid-July, Ford said a fuel injector recall would cost the company an estimated $570 million and affect second-quarter results. Wall Street, however, hasn't bothered to change its numbers. The $1.9 billion estimate is essentially unchanged over the past few days, according to FactSet.

Before the recall, things were looking good. BofA Securities analyst John Murphy expected a strong quarter, noting strong second-quarter sales. Ford sold about 612,000 vehicles in the U.S. in the second quarter, up 14.2% year over year.

Strong sales improved Ford's dealer inventories, which ended the quarter at about 101 days of sales, according to data provider Cox Automotive. That's an improvement from 113 days at the end of 2024. The industry average is about 75 days.

Ford sells cars to dealers and dealers sell to consumers. Lower numbers are better. When inventories get too high, dealers don't need to replenish stocks. Higher dealer inventories was an issue for Ford at start of 2025.

Along with quantifying tariff impacts, Ford suspended full-year guidance in May. Before that, management expected 2025 operating profit to land between $7 billion and $8.5 billion, down from $10.2 billion earned in 2024.

Investors would appreciate updated guidance. Wall Street models second-half 2025 operating income of about $3.5 billion, up from an expected $2.9 billion in the first half of the year.

Improvement will depend on improving production quality, demand for new cars, and dealer inventories in the coming months.

Coming into Wednesday trading, Ford stock was up about 5% since the Nov. 5 presidential election. General Motors and Stellantis shares were down about 3% and 30%, respectively. Ford is in a better position to deal with import tariffs. It makes about 80% of the cars it sells in the U.S. domestically. That ratio for GM and Stellantis is about 55%. Overall, the U.S. imported about 50% of new car demand in 2024, mainly from Mexico, South Korea, and Japan.

Options markets imply Ford stock will move about 6% up or down following earnings. Shares have moved an average of about 9% over the past four quarterly reports. Shares have fallen three times and risen once over that span.

Write to Al Root at allen.root@dowjones.com

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July 30, 2025 04:38 ET (08:38 GMT)

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