Ford expects profit to plateau as cost inflation takes toll

Ford Motor Co. expects profit to level off next year as inflation threatens to erode gains from its pickup and sport utility vehicle business. Adjusted earnings before interest and taxes in 2027 will be roughly in line with this year’s expectation for as much as $11 billion, CEO Jim Farley said on the company’s third-quarter earnings call. Inflation stoked by the war in Iran has pushed up the cost of logistics, raw materials and chips, which the company sees as a $2 billion headwind next year. Ford plans to offset those expenses in part by wringing more costs out of the business, Farley said. “We’re not expecting relief any time soon” from commodity inflation, Chief Financial Officer Sherry House said in a Bloomberg TV interview after Ford released results late Oct. 28. Rising costs risk taking some of the shine off sales of high-margin pickups and SUVs that have propelled earnings this year. Demand for those models helped Ford report a third-quarter profit that topped Wall Street estimates. Ford also raised the low end of its full-year profit forecast. Farley said Ford is making structural changes to sustain that momentum by controlling costs through quality improvements and tapping new sources of growth from energy storage batteries, software and services. Those initiatives will help Ford achieve its goal of an 8% adjusted EBIT margin by 2029, Farley said, compared with 6.1% through the first nine months of this year. F Quotes by TradingView See more transportation stock listings Ford’s “steady execution,” cost cuts and inventory discipline should continue to support earnings,…

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