Ford Q2 Earnings Preview: Should You Buy the Stock Now or Wait?

Ford is poised to report Q2 2025 earnings with consensus estimates of $0.34 EPS and $41.25 billion in revenue, both declining year-over-year despite a 14.2% increase in total vehicle sales driven by strong truck and hybrid demand. Profitability is expected to be impacted by a $570 million recall charge and widening losses in its Model e (EV) unit, which saw a 31% decline in fully electric vehicle sales, though hybrid volumes soared. While the Ford Pro commercial division remains a key strength, these challenges, alongside tariff pressures, underscore the importance of the upcoming earnings call for the company's 2025 outlook.

Analysis

Ford Motor Company (F) presents a contradictory picture ahead of its Q2 2025 earnings, with strong operational demand clashing with deteriorating profitability forecasts. While total vehicle sales rose a robust 14.2% year-over-year to 612,095 units, driven by a 23.5% surge in hybrid volumes and an 11.5% increase in F-Series truck sales, consensus estimates project an 8% decline in quarterly revenue to $41.25 billion and a 27.6% drop in EPS to $0.34. This disconnect is largely attributable to significant margin pressures. The Model e (EV) division is a primary concern, with pure EV sales falling 31% and its estimated pre-tax loss expected to widen to $1.36 billion. Furthermore, the company will absorb a $570 million charge for recall-related expenses, and even its profitable Ford Blue and Ford Pro segments are forecasted to report year-over-year declines in EBIT. Despite the stock's 15% year-to-date outperformance and attractive valuation with a 0.28 price-to-sales ratio, the combination of widening EV losses, persistent recall costs, and tariff headwinds creates significant uncertainty for the full-year outlook, where EPS is already expected to contract by 38%.

Key Decisions for Investors

• Investors should consider delaying new long positions until after the July 30th earnings release to gain crucial clarity on the full-year 2025 guidance, particularly regarding tariff impacts and the margin trajectory of the Model e division.
• Monitor the EBIT performance of the Ford Pro and Ford Blue segments, as their ability to generate cash flow is critical to offsetting the widening losses from the EV business and sustaining the company's approximate 5% dividend yield.
• Pay close attention to management's commentary on warranty expenses and recall frequency, as the $570 million Q2 charge highlights a persistent operational risk that could continue to erode profitability despite strong underlying consumer demand for its hybrid and truck offerings.