Ford's Operating Income Falls by Two-Thirds -- 2nd Update
04 Febrero 2020 - 04:23PM
Noticias Dow Jones
By Mike Colias
Ford Motor Co. said fourth-quarter operating income sank by
two-thirds, and it issued a lower-than-expected profit outlook for
2020, the latest signs of trouble for Chief Executive Jim Hackett's
turnaround plan.
Ford said operating income for the October-to-December period
was $485 million, down from $1.5 billion a year earlier. Earnings
per share adjusted for one-time items were 12 cents, well short of
analysts' estimate of 17 cents a share.
Ford pinned the shortfall in part on lower production volumes in
North America stemming from problems with launches of key models,
including the redesigned Explorer and Escape sport-utility vehicles
and its Super Duty pickup truck. It also cited higher warranty
costs and a bonus payout to United Auto Workers that totaled about
$600 million.
Ford booked a net loss of about $1.7 billion for the quarter
which it attributed to losses from higher contributions to its
pension plans overseas. Revenue fell 5%, to $39.7 billion.
Ford shares fell more than 10% in after-hours trading. They are
flat for the year, closing at $9.17, and down about 17% since Mr.
Hackett took over as CEO in May 2017.
The results capped a disappointing year for Ford, in which its
net income fell to just $47 million -- down from $3.68 billion in
net income a year earlier -- mostly due to restructuring costs in
Europe and adjustments to global pension plans.
Revenue for the full year fell 3% to was $155.9 billion.
The auto maker forecast earnings per share this year in the
range of 94 cents to $1.20, lower than the average estimate of
$1.30, according to S&P Global Market Intelligence.
"Financially, it wasn't OK," finance chief Tim Stone said of the
2019 results during a discussion with reporters at Ford's
headquarters. "Strategically...I think we made strong
progress."
Nearly three years into the top job, Mr. Hackett's strategy to
revitalize Ford -- which includes a multiyear, multibillion-dollar
restructuring -- hasn't returned the company to earnings growth or
restored profitability overseas, where Ford is closing plants and
shedding thousands of workers to cut costs. Ford's operating profit
has fallen in both full years of his tenure.
This year "will be crucial for Ford, as it must show better
results" from Mr. Hackett's revitalization plan, Credit Suisse
analyst Dan Levy wrote in an investor note Tuesday. "Ford must
start meeting/exceeding investor expectations to reinvigorate
investor interest."
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
February 04, 2020 17:08 ET (22:08 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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