How Ford's Q4 Shows More Profits on the Way
How Ford's Q4 Shows More Profits on the Way
Daniel Miller, The Motley FoolThu, February 26, 2026 at 6:25 AM UTC
0
Key Points -
Despite similarities in business strategy, these three automakers have traded differently in recent years.
Ford is pivoting its strategy to stoke growth on the top- and bottom-lines.
Ford Pro could be the automaker's key to improving profits.
10 stocks we like better than Ford Motor Company ›
Ford Motor Company (NYSE: F), General Motors (NYSE: GM), and Stellantis (NYSE: STLA) certainly have much in common as automakers, especially considering their core profit engine, North America. Despite so much in common, the three stocks have traded wildly differently over the past three years with GM nearly doubling, Ford remaining largely flat with a 9% gain, and Stellantis shedding roughly half of its value. Ford's stock price seems stuck in a rut, and one way to help push its value higher is improved profitability, and the fourth quarter gave investors a tiny glimpse of how more profitability is happening.
The growth is there
If investors have been listening, there's a growth story for Ford. In fact, Ford just posted record revenue for the full-year 2025 at $187.3 billion, which was its fifth consecutive year of growth. Ford is currently pivoting its sales strategy away from less profitable full-electric vehicles (EVs), waiting for the market to develop before its next push in 2027, and toward historical gasoline-powered SUVs, trucks, and hybrid options which are much more profitable now. In fact, in part thanks to hybrid sales, Ford's U.S. market share moved 0.6 percentage points higher to 13.2%, its best sales performance since 2019.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Ford is working on a bottom-line growth story for investors, too.
Ford Mustang Mach-E parked by a wall and with its reflection in water.
Image source: Ford Motor Company.
Project: Improve margins
Like many of its competitors, Ford immediately went to work last year on reducing the impact of new tariffs slapped on imported vehicles and automotive parts. The good news is that it's been able to deliver investors $1.5 billion, excluding tariff impacts, in total cost reductions, which were 50% more than initial targets.
Further adding to the improving margin story is that Ford's Raptor and other performance trims, which generate higher average transaction prices (ATPs) and margin, accounted for a sizable 20% of its U.S. sales mix, a 2 percentage point gain. The F-Series, which hauls the big bucks for the Detroit icon Ford, just put the finishing touches on its 49th consecutive title as America's best-selling truck, with sales moving more than 8% higher in 2025.
Last, but certainly not least, is Ford's hidden gem: Ford Pro. The unit is responsible for Ford's commercial business -- think fleet, rental, large vans, and B2B sales -- and generated a hefty $6.8 billion in earnings before interest and taxes (EBIT) in 2025 at an impressive 10.3% margin, which is high in the mainstream automotive industry. For context, Ford Blue, the company's traditional vehicle-selling business, generated $3 billion EBIT in 2025 at a much more modest margin of 3%. Icing on the cake is that Ford Pro paid subscriptions were up 30% in 2025, compared to the prior year, with software business generating gross margins over 50%. Ford Pro's software and physical services contributed 19% of Ford Pro's EBIT (TTM).
Advertisement
What it all means
For investors, while Ford's bottom-line disappointed Wall Street analysts during Q4, and the company's stock price has been stuck in a rut for the past three years, there is still a growth story. Ford's top-line is setting records; it's working on improving margins and reducing costs; and when losses reverse in its Model e division, responsible for its EVs, it will be a huge boost to Ford's profitability in the next few years.
Should you buy stock in Ford Motor Company right now?
Before you buy stock in Ford Motor Company, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ford Motor Company wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $420,864!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,182,210!*
Now, it’s worth noting Stock Advisor’s total average return is 903% — a market-crushing outperformance compared to 192% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of February 26, 2026.
Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool recommends General Motors and Stellantis. The Motley Fool has a disclosure policy.
Source: “AOL Money”
