DETROIT — Ford Motor beat Wall Street’s top- and bottom-line expectations for the fourth quarter but forecast a tougher year ahead for the company, as CEO Jim Farley promises to increase vehicle quality and improve costs.

Shares of Ford fell 5% in after-hours trading.

Ford’s forecast this year calls for adjusted earnings before interest and taxes (EBIT) of $7 billion to $8.5 billion; adjusted free cash flow of $3.5 billion to $4.5 billion; and capital expenditures of between $8 billion to $9 billion.

For 2024, Ford reported adjusted EBIT of $10.2 billion, or $1.84 adjusted earnings per share, and net income of $5.9 billion, or $1.46 EPS. The automaker reported total revenue, including its financial arm, was a company record of $185 billion.

Here’s how the company performed in the fourth quarter, compared with average estimates compiled by LSEG:

• Earnings per share: 39 cents adjusted vs. 33 cents expected
• Automotive revenue: $44.9 billion vs. $43.02 billion expected

The company said its 2025 guidance, which is in line with or lower than many analyst expectations, “presumes headwinds related to market factors” such as 2% industry lower pricing and slower sales but not additional tariffs by the Trump administration.

“Given the pause in the current tariff situation, specifically in Mexico and Canada, we are not choosing to take any actions at this time,” said incoming Ford CFO Sherry House. “We’re going to let this run itself out so we can better understand the potential impacts on our business.”

House said this year’s forecast also takes into account expectations of a $1 billion reduction in material and warranty costs compared to last year. This follows $1.4 billion in cost reductions in 2024, Ford said.

The first half of this year is expected to be weaker than the backend. That includes first-quarter adjusted EBIT that is projected to be roughly breakeven due to lower wholesales and less profitable vehicles being produced, including launch activity at major U.S. assembly plants in Kentucky and Michigan.

For the fourth quarter of 2024, Ford reported net income of $1.8 billion, or 45 cents per share, compared with a net loss of $526 million, or a loss of 13 cents per share, a year earlier. Adjusting for one-time items, the company reported earnings per share of 39 cents.

Ford was under pressure to perform after crosstown rival General Motors easily topped Wall Street’s fourth-quarter expectations and said its 2025 guidance is in line with or above analysts’ expectations.

Ford underperformed expectations last year largely due to unexpected warranty and recall problems plaguing the company’s earnings. Shares of the automaker declined nearly 20% in 2024 amid the problems, which Farley has promised to rectify.

“‘I’m really excited about this year because it’s Ford’s chance, like in ’07 and ’08, to take our future in our own hands and perform financially like we should,” Farley told reporters last month. “That’s all on our team.”

This is breaking news. Please check back for updates.