Ford beat Q2 estimates on Ford Pro's 15% margin. The commercial unit now drives 40% of auto profit. The question is whether that margin holds through year-end.
Ford Motor Company reported second-quarter earnings that beat analyst expectations, driven by stronger-than-expected performance in its Ford Pro commercial unit. The stock rose 3.2% in after-hours trading following the release.
Adjusted earnings per share came in at $0.72, topping the $0.68 consensus estimate. Revenue reached $47.8 billion, up 6% from a year earlier. The beat was powered by Ford Pro, the commercial vehicle division, which posted a 15% margin – well above the company's overall automotive margin of 8.3%.
Ford Pro's operating profit hit $3.9 billion for the quarter, up from $3.2 billion a year ago. The unit now accounts for roughly 40% of Ford's total automotive profit, up from 35% in the same period last year. The division benefits from a mix of higher-margin Super Duty trucks, fleet service contracts, and software subscriptions tied to its telematics platform.
The company maintained its full-year adjusted EBIT guidance of $10 billion to $12 billion, a range that implies second-half earnings roughly in line with the first half. That guidance assumes no major disruption from the ongoing UAW contract negotiations, which remain unresolved.
Ford's EV segment, Model e, lost $1.1 billion in the quarter, roughly in line with the first quarter's $1.3 billion loss. The company said it is slowing its EV production ramp to match demand, which has softened across the industry. Ford now expects to build 600,000 EVs annually by the end of 2024, down from an earlier target of 2 million by 2026.
The company's balance sheet showed $29 billion in automotive cash and $45 billion in total liquidity. Ford's debt-to-EBITDA ratio stood at 2.1x, within its target range. The dividend, currently $0.15 per quarter, remains covered by free cash flow.
Ford's stock page shows an Alpha Score of 44 out of 100, a Mixed rating. The score reflects the tension between Ford Pro's strong margins and the drag from Model e losses. The valuation, at 6.8x forward earnings, is below the five-year average of 8.2x.
The key question for the second half is whether Ford Pro can sustain its margin trajectory. The unit's margins have benefited from tight supply in the commercial truck market, a dynamic that could ease as production normalizes. Ford's guidance implies management sees that risk as manageable.
The company's next scheduled event is its third-quarter earnings release, expected in late October.
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