Ford Swings to a Loss, Misses Analysts' Profit Estimates
January 23 2019 - 4:50PM
Dow Jones News
By Mike Colias
Ford Motor Co. said Wednesday its fourth-quarter operating
income dropped 28% amid worsening losses in China and Europe,
underscoring the pressure on the auto maker's stout U.S. business
as Chief Executive Jim Hackett tries to revitalize the company.
The company's operating income, which is adjusted for one-time
items, totaled $1.5 billion, generated entirely by its lending arm
and the North American business. Each of Ford's four other regional
businesses posted losses for the quarter and the year.
Ford's net income swung to a loss of $116 million, from a $2.5
billion profit a year earlier, partly from a nearly $900 million,
noncash hit to the value of its global pension plans, driven by the
stock-market downturn late last year.
Fourth-quarter earnings per share were 30 cents, below the 32
cent average forecast of Wall Street analysts. Ford had disclosed
the fourth-quarter EPS results during a presentation to analysts
last week.
For the full year, Ford's operating income fell 27% to $7
billion. Finance chief Bob Shanks on Wednesday reiterated that 2019
could be an improvement over last year, but that many variables
remain out of the company's control, including trade uncertainty
and commodity costs.
"The external environment has been quite volatile. Policy
matters have been unpredictable," Mr. Shanks told reporters
Wednesday, noting that tariffs cost the company more than $750
million last year.
He cited the risk of the U.K. leaving the European Union without
a trade deal, which he said would hurt Ford's substantial
manufacturing and sales operations in the country.
Mr. Hackett's turnaround plan hinges on restructuring weak parts
of the business around the globe, including Europe, while betting
bigger on trucks and SUVs in the U.S. Ford is also slashing a
cumulative $25.5 billion in costs by 2022 while overhauling its
lineup of vehicles in most major markets after letting some of them
age for longer than they should have, executives have said.
Still, analysts have expressed frustration with the pace of Mr.
Hackett's efforts and have said he should offer more specifics
about his plan. Ford shares tumbled last week after the company
offered an uncertain outlook for 2019. Some analysts said the
effect of the cost-cutting effort has been slow to show up in
Ford's bottom line.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
January 23, 2019 16:35 ET (21:35 GMT)
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