High demand for expensive pick-up trucks! Despite a sharp increase in product costs of $2 billion, Ford Motor Company still raised its full-year profit guidance against the trend.

Note that Ford Motor Company (F.US) has raised its full-year profit outlook, attributing it to strong demand for high-profit-margin pickups and SUVs, but also warning that unexpected increases in raw material costs will put pressure on earnings. The financial report shows that Ford's revenue for the first quarter was $39.82 billion, a year-on-year increase of 6.4%, exceeding expectations by $990 million; adjusted earnings per share were $0.66, exceeding expectations of $0.47. In a statement on Wednesday, the company indicated that it now expects its earnings before interest and taxes (EBIT) for the year to be between $8.5 billion and $10.5 billion, an increase of $500 million compared to previous forecasts. However, Ford did not proportionally raise its full-year profit outlook in line with the significant outperformance of the first quarter, indicating a cautious outlook for the year ahead due to the spike in energy and raw material prices resulting from the Iran war. Ford expects a $2 billion hit to profits due to rising prices of materials like steel and aluminum, which is double the previous forecast and aligns with the views of its competitor General Motors Company. The first-quarter performance highlights how Ford's shift in focus back to producing high-priced pickups and SUVs is driving profit growth amidst macroeconomic turbulence. Ford's traditional fuel and hybrid vehicle business Ford Blue achieved an EBIT of $1.94 billion in the quarter, significantly higher than the $96 million in the same period last year. Despite an 8.8% decline in car sales in the U.S. in the first quarter, sales of the F-Series pickup fell by 16%. Ford's Chief Financial Officer Cheryl House stated on Wednesday that the large SUVs such as Explorer and Expedition were particularly strong performers, with off-road performance models accounting for nearly 25% of the company's U.S. sales. She said, "These models happen to be the higher-end and higher-value models." The updated performance guidance also reflects a one-time gain of $1.3 billion in the first quarter, resulting from the Supreme Court overturning several of Trump's tariffs. Ford warns that its raised expectations do not take into account the long-term war with Iran or factors such as a U.S. economic recession. "Our team is actively managing a complex external environment," House said. Despite the positive news, Ford reported a $1.9 billion loss in adjusted free cash flow due to heavy investments in establishing a new energy storage business and preparing for the launch of a $30,000 electric pickup next year. Earlier this year, sales and production of the F-Series pickups significantly declined due to the aftermath of a fire at Novelis Inc.'s aluminum plant in New York last year, which supplies materials for pickup truck panels. Ford stated that the plant will not resume operations until summer and warned that pickup production will not return to normal until the second half of the year. Due to production disruptions, Ford lost around $2 billion in volume, sourcing aluminum from overseas and paying expensive tariffs to produce body panels. House noted that despite the Supreme Court's ruling, Ford anticipates that Trump-era tariffs will still impact earnings by $1 billion this year. Following the outbreak of the Iran war on February 28, U.S. gasoline prices surged and consumer confidence reached historic lows. This has negatively impacted Ford's stock price, which has already fallen by over 7% this year, reversing the strong gains seen in 2025. Morningstar analyst David Whiston said in an interview prior to the financial report release, "The decline in Ford's stock price almost started simultaneously with the war breaking out. A slew of issues broke out at the same time, which is unfortunate because it's not all their fault." At the time of this financial report release, Ford had just restructured its loss-making electric vehicle business, including taking a $1.95 billion impairment charge on underperforming electric vehicle assets. Doug Field, head of Ford's electric vehicle division, announced his departure earlier this month as part of a major management reshuffle, with his duties taken over by Chief Operating Officer Kumar Galhotra. Ford's resilient logistics and commercial vehicle business Ford Pro reported an EBIT of $1.68 billion, higher than $1.31 billion in the same period last year. Ford stated that due to a shortage of F-Series inventory caused by a supplier fire, sales of some work trucks were delayed to the second half of the year. The electric vehicle division Model E reported an EBIT loss of $777 million, an improvement over the $849 million loss in the same period last year. Following the halt in production of the F-150 Lightning electric pickup, Ford's electric vehicle sales in the U.S. declined by 70% in the first quarter.