Ford results dented by restructuring, gives weaker-than-expected forecast
By Nick Carey and Ben Klayman
DEARBORN, Mich. (Reuters) - Ford Motor Co (NYSE: F) on Wednesday reported a lower-than-expected profit, weighed down by charges to restructure its units in Europe and South America, and the automaker gave a full-year earnings forecast that fell short of analysts' expectations.
Ford shares fell as much as 7 percent in after-hours trading.
Virtually all of Ford's second-quarter pre-tax profit came from North America - its most lucrative market - where highly-profitable pickup trucks drive margins for the Dearborn, Michigan-based automaker and its Detroit rivals, General Motors Co (NYSE: GM) and Fiat Chrysler Automobiles NV
The automaker also posted a small profit in Europe and a far smaller loss in China compared with the second quarter of 2018 as better pricing and new luxury models helped offset a poor performance in that market.
Ford's second-quarter sales in China slid 21.7% in the second quarter after a first-quarter drop of 35.8%.
In April, Ford said it planned to launch more than 30 new models over the next three years to overhaul its vehicle lineup in China.
The automaker's ongoing restructuring includes cutting costs and overhauling its product lineup in key global markets like China and Europe. The company said Wednesday it had so far only recorded $2.2 billion of the projected $11 billion in charges it previously said it would take for the global restructuring.
Last month, Ford said it would cut 12,000 jobs, close five plants and cut shifts at other factories in Europe by the end of 2020 in an effort to return that region to profitability.
In May, the company said it would eliminate about 10% of its global salaried workforce, cutting about 7,000 jobs by the end of August.
Earlier this month, Ford and Volkswagen AG
Ford had previously not provided an earnings forecast for this year. The company said on Wednesday it now expects full-year earnings between $1.20 and $1.35 per share. Analysts have estimated the automaker will earn $1.39 per share this year, according to IBES data from Refinitiv.
Speaking to reporters, Chief Financial Officer Tim Stone said the company now expects adjusted 2019 pre-tax profit of up to $7.5 billion, compared with $7 billion in 2018.
"We have a long way to go ... to execute on our redesign," Stone said. "We have a lot of work to do."
For the first half of the year, Ford reported a pre-tax profit of $4.1 billion, meaning that the automaker will, at best, deliver a weaker pre-tax profit of $3.4 billion for the second half of 2019.
The No. 2 U.S. automaker posted a second-quarter net profit of $148 million, or 4 cents per share, down from $1.1 billion, or 27 cents per share, a year earlier.
Excluding one-time charges, the company earned 28 cents per share. Analysts had expected Ford to earn 31 cents a share.
Excluding a write-down of its stake in a software company, Ford said it would have earned 32 cents per share.
Revenue was flat at $38.9 billion, above the $35.07 billion expected.
(Reporting by Nick Carey and Ben Klayman; editing by Nick Zieminski and G Crosse)