Updated Version 1 - Ford's Core Profit Rises Slightly in Q3 Despite Higher Commodity Costs

Added stock price data in the 5th paragraph and included charts

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Reuters Detroit, October 28 - Ford Motor Company (F.N) posted a modest increase in third-quarter core profit to $2.7 billion, as the Michigan-based automaker overcame production challenges for its best-selling F-150 pickup and surging commodity costs.

The automaker said Wednesday it is facing rising costs from multiple factors, including Middle East conflicts, increased copper and steel prices, higher fuel costs, and climbing chip prices. Ford raised its full-year commodity cost estimate from about $2 billion to nearly $2.5 billion.

The situation in Iran has exacerbated cost pressures across sectors, with higher diesel prices driving up shipping costs, and rising raw material prices potentially squeezing margins.

Ford raised the lower end of its full-year guidance by $500 million to $10.5 billion, while maintaining the upper end of its EBIT range at $11 billion.

After hours, Ford’s shares fell by about 1%.

General Motors GM.N saw a sharp fall in its stock price last week after highlighting that, despite strong Q3 profits, climbing commodity costs would pressure its financial position.

Last month, production of Ford’s F-150 pickups was interrupted for nearly a week due to an issue with an unidentified supplier. Previously, the automaker had been racing to make up for significant losses in pickup output following a fire last year at a key aluminum supplier, Novelis, in New York.

Ford CFO Sherry House told reporters on Wednesday: “The recovery at Novelis is largely complete.”

Adjusted earnings per share were $0.49, above the $0.40 per share forecast by analysts at London Stock Exchange Group (LSEG). The automaker posted revenue of $49.5 billion and net income of $2 billion. House said Ford expects its core profitability in 2027 to be roughly in line with that of 2026.

Urgency rises for trade agreement

RBC Capital Markets analyst Tom Narayan noted that robust demand has given automakers strong pricing power, with Ford expecting prices to increase by 1% this year.

Narayan also said that if a US-Mexico bilateral trade deal is reached by year-end, Ford and General Motors will benefit in particular. Reuters also reported earlier this week (link) that after talks broke down in August, the US and Canada are now working on an agreement to ease US tariffs imposed on Canadian steel and autos.

A Honda executive warned at a Reuters event on Tuesday that US plans to raise tariffs on Canadian steel and auto imports from January 1 would have a “catastrophic” effect on the sector. These tariffs, currently 25%, are set to double at the start of next year.

Ford CEO Jim Farley has urged a quick solution on the USMCA so that US automakers can compete with Japanese and Korean peers—currently, under trade deals with Washington, Japanese and Korean vehicles face a 15% US tariff.

Ford produces and assembles some key components and vehicles in neighboring North American countries, including Bronco Sport and Maverick in Mexico, and Super Duty pickups in Canada.

As of the third quarter, Ford’s annual US vehicle sales fell 8.6% year on year, mainly due to the phaseout of the Escape SUV and declining electric and hybrid vehicle sales.

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