00:00All right, Sherry, let's get right to it here. For the most recent quarter here,
00:03the numbers look pretty decent, though we should point out there was a, I guess, a one-off
00:07that we got with related to, is that a reimbursement for some of the IEPA tariffs?
00:14Well, yes, you're right. We had a fantastic first quarter. We just delivered $3.5 billion
00:20in adjusted EBIT. And this quarter does have a one-time tariff receivable in it.
00:26What that is for is we paid tariffs last year between March of 2025 and February of 2026
00:35of about $1.3 billion. And we now are going to be getting that back in the form of a
00:40receivable.
00:41But even after taking that into consideration, we had a really strong beat this quarter,
00:47about a billion. And what that's comprised of is we had global revenues that were up about 6%
00:54for the quarter. And that really is based on strong net pricing. We had great product mix.
01:01And also, our share of revenue was the highest it's been in five years. Also contributing to this
01:08quarter was our pro software and services. Now, this is super important for Ford because this is
01:15recurring revenue. And it was up 30%. And that has gross margins in excess of 50%.
01:21And then finally, we've been on track with our cost savings as well. And we are on track right now
01:27to
01:28get another billion dollars out this year in both material cost as well as warranty. And that's going
01:33to be in addition to the $1.5 billion from last year. And as a result, we raised our guide.
01:39You did. You raised that full year EBIT guide by roughly about $500 million, $8.5 billion to $10.5
01:46billion, up from $8 billion to $10 billion. Though there's a big asterisk there here. I mean,
01:51you make it clear that that guidance does not include the potential impacts of what's been going
01:56on in the Middle East. Have you had a chance to sort of assess that impact? And when do you
02:01think you
02:01might have to maybe adjust that guidance as a result?
02:06Yeah. So we right now are looking at consumer sentiment. We're also looking at the forward curves.
02:12And the forward curves are still holding that this Middle East situation is going to be more on the
02:19short-lived side. You know, as a result, at this point in time, we are believing that there's going to
02:26be
02:27some recovery as we start to exit Q3, as we get through Q3 and Q4 for the balance of the
02:34year.
02:34So at this point, our forecast presumes that it will still be high for a couple of months here in
02:40terms of fuel prices and energy prices. But we do see some retraction maybe in Q3 and Q4. We will
02:47be
02:47watching that very carefully. And we will, of course, be back with any types of adjustments as necessary.
02:54Absolutely, Sherry. I mean, you think about affordability right now, that's absolutely a
02:58concern. Gas still above $4 a gallon. And you mentioned consumer sentiment. We know that
03:04that has been in the gutter for a while here. And, you know, I wonder if you take a look
03:09at
03:09past cycles, if we stay around these levels with these different sort of cross currents,
03:14how does that typically impact what you're seeing when it comes to your SUVs, which when it comes to
03:20your pickup trucks, which taking a look at the past quarter, it looks like those sales have been
03:25particularly strong. Yeah, what's interesting is we are in a different situation than we were
03:32in past periods when we've had fuel shocks in the past. What's a bit different is we've got a lot
03:38stronger powertrains out there that are much more capable with a lot more miles per gallon. So we've
03:43got a big lineup of hybrids, of plug-in hybrids, and also a battery electric vehicle. So you have a
03:48lot of
03:49our customers are in those products as well. Another thing that is different is the fuel cost
03:54is a percentage of disposable income is now lower than it was in the past. And finally, as we look
04:01to our truck buyers, we find that they are actually quite resilient. And part of the reason for that is
04:07we have our pro business, our commercial business, and there are truck buyers. This is a non-discretionary
04:13spend item for them. It's really, it's part of their vocation. They're hauling, they're towing,
04:19they need these vehicles. So we're not seeing much of an impact as of yet, and partially because we have
04:26such a strong multi-energy lineup that our customers can turn to. Yeah, it's a good reminder that those
04:33pickup trucks for many people, not discretionary, as you said, it's a staple. But even still with this
04:39environment that we're in where you do have higher gasoline costs, the narrative has entered the
04:44conversation that maybe you are seeing EV sales, hybrid sales being boosted by that. And I know,
04:51you know, we only have about a month or two months of, you know, this playing out. But are you
04:57seeing
04:57any truth to that when you take a look at your own lineup? Well, we're seeing that used car prices
05:04in EVs are starting to go up a little. And there was a bit of a increase in EV sales
05:10in March,
05:10but we thought that might've been a bit more attributed to some of the competitors adding
05:15some incentive spend versus a structural difference at this point in time. So there might be some small
05:21green shoots showing that there might be an EV increase, but at the moment, we're not seeing
05:25anything substantial. Just real quickly, Sherry, I am though curious too, when we talk about
05:32whatever the future of EVs are. And I mean, I see, you know, we're still kind of anticipating a loss.
05:37And I know that Ford's kind of making that transition with a runway, I guess, out to 2029,
05:41where we start to see all of that smoothed out here. I don't want to use the word abandoned,
05:46but have we just kind of pulled back completely from an EV build out at Ford? Or is there going
05:52to
05:52be a reset of that, a material reset of that in some way? We have far from abandoned EVs. In
05:59fact,
05:59we are as focused as ever on them. We have just become more focused on providing products that
06:05are affordable and also profitable. So our brand new universal EV platform that's planning to come
06:11out in 2027 is designed to be affordable. And this is going to be a fantastic product. Also,
06:18we're looking at a lot of other multi-energy products as well. So we are investing in more
06:23hybrids across many of our nameplates. So we're going to be offering really by 2029,
06:30our expectation is about 50% of our fleet will be electrified. And that's up from about 17% of
06:38our
06:38fleet in 2025. So a big run up ahead and we are every bit as committed to EV and multi
06:45-energy as we've
06:46ever been.
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