Ford Motor reported a rebound in profit in the first three months of the year, thanks in part to an expected refund of $1.3 billion in federal import duties that was overturned by the Supreme Court.
The company said it earned $2.5 billion in the first quarter, up from $500 million a year earlier, with revenue rising 6 percent to $43.3 billion.
“Ford has had a solid start to the year,” the company’s chief financial officer, Sherry House, said on a conference call with reporters.
Ms. House added that Ford raised its profit guidance for the year by $500 million and now expects earnings before interest and taxes, adjusted for special items, of $8.5 billion to $10.5 billion. Ford expects to pay about $1 billion in U.S. tariffs this year, half of what it previously predicted.
The rollback is the result of a Supreme Court ruling in February that found President Trump exceeded his authority when he imposed tariffs under the International Emergency Economic Powers Act of 1977. That law gives the president certain powers in the event of domestic emergencies. This month, the administration set up a system through which businesses can apply for refunds.
While the court struck down the emergency powers tariffs, other duties on imported steel, aluminum, automobiles and auto parts remain in place because they were imposed under a different law.
On Tuesday, General Motors said it expected to receive $500 million in compensation for the duties. Although compensation has not yet been paid, both automakers posted profits in the first quarter.
Some good news on the tariff front will be offset by higher costs elsewhere.
Ms House said Ford now expects its commodity costs – for materials such as aluminum and steel – to rise by $2bn this year, double the amount it previously expected. Ms House said the company had experienced aluminum shortages even before the US-Israel war in Iran, and the conflict had further increased costs and reduced supplies.
Ford has struggled to find enough aluminum since last fall, when a serious fire at a plant in Oswego, N.Y., owned by Novelis disrupted its supply.
Ford said it sold 934,000 cars and light trucks worldwide in the first quarter, down 4 percent from a year earlier. Its electric vehicle business lost $777 million, excluding some items, an improvement on the previous year, when it lost $849 million.
The automaker earned $1.9 billion from sales of gasoline-powered cars and trucks and $1.7 billion from the Ford Pro division, which provides vehicles and services to business customers.
