Ford forecasts weaker-than-expected fourth quarter
profit
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[January 16, 2019]
By Ben Klayman
DETROIT (Reuters) - Ford Motor Co <F.N>
gave a fourth-quarter earnings forecast on Wednesday that was below
analysts' expectations, sending shares down more than 2 percent in
premarket trading.
The No. 2 U.S. automaker said it could see improvement in 2019 earnings
and revenue as global industry sales remained flat, but did not provide
any figures.
"For 2019, we see the potential for year-over-year improvement in
company revenue, EBIT and adjusted operating cash flow," Chief Financial
Officer Bob Shanks said in a statement.
He added that the company expected to fully fund its business needs in
the coming year "while maintaining cash and liquidity levels at or above
our target levels."
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Still, Ford saw headwinds for the year ahead, citing tariffs and high
commodity costs, both of which also impacted its 2018 earnings. The
details on the outlook were contained in slides just ahead of a
presentation by Ford early on Wednesday at a Deutsche Bank conference in
conjunction with the 2019 North American International Auto Show in
Detroit.
Helping the company will be new product rollouts, including the Ford
Ranger pickup truck and Explorer sport utility vehicle, its
restructuring initiatives, a recovery in China, and the redesign of its
money-losing European operations.
Last week, Ford's larger U.S. rival, General Motors Co <GM.N> said it
expected higher profits in 2019, offering an estimated range that was
far stronger than Wall Street analysts had forecast.
RBC Capital Markets analyst Joseph Spak said the fact that Ford did not
provide a formal earnings range for 2019 may be interpreted negatively
as the company having less visibility.
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![](../images/011619pics/busine37.jpg)
Workers prepare for the Ford Motor Company 2019 reveal at the North
American International Auto Show in Detroit, Michigan, U.S., January
14, 2019. REUTERS/Jonathan Ernst
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"In our minds, the lack of a formal range is likely to lead to more dispersion
of estimates and expectations, making it more challenging to 'hit' investor
expectations," he said in a research note. "That could add difficulty to Ford's
effort to build market confidence in their turnaround plan."
Ford said it expects 2018 adjusted earnings of $1.30 a share on revenue of
$160.3 billion. In October, the Detroit area automaker said it expected to earn
in the range of $1.30 to $1.50 per share while analysts were expecting $1.33 per
share, Refinitiv IBES data showed.
For the fourth quarter, Ford expects adjusted earnings of 30 cents a share,
below the 32 cents analysts were expecting.
On Tuesday, Ford and Germany's Volkswagen AG <VOWG_p.DE> said they would join
forces on commercial vans and pickups and were exploring joint development of
electric and self-driving technology in a bid to save the automakers billions of
dollars.
Shares of Ford fell 2.4 percent to $8.62 in premarket trading.
(Reporting by Ben Klayman in Detroit, additional reporting by Ankit Ajmera in
Bengaluru; Editing by Jason Neely and Bernadette Baum)
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