Ford Motor Company F recently announced in a filing that it expects to report a pre-tax remeasurement gain of approximately $0.7 billion in its fourth-quarter 2024 results. This gain is linked to its pension and other postretirement employee benefits (OPEB) plans and is based on the mark-to-market accounting method, which reflects remeasurement gains and losses in income as they occur.
The projected gain includes a $0.3 billion loss from U.S. pension plans, a $0.9 billion gain from non-U.S. pension plans and a $0.1 billion gain from global OPEB plans. The primary driver of the gain is higher discount rates compared to the end of 2023, partially offset by lower-than-expected asset returns.
After accounting for taxes, Ford estimates the remeasurement will boost net income by about $0.4 billion, reflecting tax expenses based on the jurisdictions where these gains and losses are recorded. Notably, these remeasurement gains and losses are categorized as special items and will not affect F’s adjusted EBIT or adjusted earnings per share.
Ford also mentioned that the remeasurement had no impact on its 2024 cash flow or its pension contribution plans for 2025. The company's funded plans remain fully funded, with the underfunded status for pension and OPEB plans projected to be approximately $0.5 billion and $4.4 billion, respectively, at the end of 2024, compared to $2.3 billion and $4.7 billion at the end of 2023.
In a separate development, Ford is recalling 272,817 vehicles in the United States due to potential battery failures, per the National Highway Traffic Safety Administration. The recall includes certain 2021–2023 Bronco Sport and 2022–2023 Maverick models. The 12-volt battery in these vehicles may degrade and fail suddenly, potentially disabling electrical accessories, such as hazard lights, or causing a loss of drive power, thereby increasing the risk of a crash. Dealers will inspect and replace the affected batteries at no cost to owners.
Ford’s Zacks Rank & Key Picks
F currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited GELYY, Blue Bird Corporation BLBD and Allison Transmission Holdings, Inc. ALSN. While GELYY and BLBD sport a Zacks Rank #1 (Strong Buy), ALSN carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELYY’s fiscal 2025 sales and earnings suggests year-over-year growth of 66.62% and 149.31%, respectively. EPS estimates for fiscal 2025 and 2026 have improved by 15 cents and 38 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BLBD’s fiscal 2025 sales and earnings suggests year-over-year growth of 10.97% and 12.14%, respectively. EPS estimates for fiscal 2025 have improved 18 cents in the past 60 days.
The Zacks Consensus Estimate for ALSN’s 2024 sales and earnings suggests year-over-year growth of 6.10% and 11.89%, respectively. EPS estimates for 2024 and 2025 have improved 2 cents and 3 cents, respectively, in the past 30 days.
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