Ford fourth-quarter results weighed down by losses overseas

By Nick Carey and Ben Klayman DETROIT (Reuters) - Ford Motor Co on Wednesday posted a lower operating fourth-quarter profit as losses in every global region except North America weighed on results. The No. 2 U.S

Reuters January 24, 2019 06:05:08 IST
Ford fourth-quarter results weighed down by losses overseas

Ford fourthquarter results weighed down by losses overseas

By Nick Carey and Ben Klayman

DETROIT (Reuters) - Ford Motor Co on Wednesday posted a lower operating fourth-quarter profit as losses in every global region except North America weighed on results.

The No. 2 U.S. automaker, which has announced an alliance with Germany's Volkswagen AG , is restructuring operations globally. It is making cuts in Europe, looking to reorganize its South American operations and turn around China - all unprofitable regions. "It was not a year we were happy with and the fourth quarter continued that theme," Chief Financial Officer Bob Shanks told reporters at the company's headquarters outside Detroit. He acknowledged the potential this year for disruptions such as strikes in regions where it is restructuring. In 2018, Ford took a $3.3 billion combined hit from higher tariffs and commodity costs, unfavourable foreign exchange and recalls related to former airbag maker Takata.

Last week, Ford provided a cloudier 2019 outlook because of tariff costs and uncertainty over Britain's exit from the European Union, only saying it had the potential for higher earnings and revenue.

That was in contrast to Ford's larger U.S. rival, General Motors Co , which on Jan. 11 forecast higher 2019 earnings that far surpassed analysts' estimates.

Shanks reiterated on Wednesday that Ford's market-leading presence in Britain gave it extensive exposure to the effects of Brexit. Ford said on Jan. 10 that it would cut thousands of jobs and look at plant closures in Europe as part of its plan to return to profit in the region. Ford posted a fourth-quarter net loss of $116 million, or 3 cents a share, down from a net profit of $2.5 billion, or 63 cents a share, in the same quarter in 2017, largely because of one-time pension costs and other charges.

Excluding one-time charges, it earned 30 cents a share, in line with an outlook Ford executives provided last week that was shy of Wall Street's expectations.

In North America, Ford posted a pre-tax profit of $2 billion. It saw losses in every other region, with Asia reporting the largest loss of $381 million, driven by plummeting sales in China.

On Jan. 15, Ford and VW said they would join forces on commercial vehicles and were exploring joint development of electric and self-driving technology.

On Wednesday, sources said that Germany's automakers, including VW, were in talks to jointly develop autonomous cars. VW reiterated it was still looking for new partners, while Shanks said the companies were still in talks.

Ford, which ended 2018 with $23.1 billion in cash, previously said it remained committed to its operations in Europe and South America, and its losses in China would narrow this year. Chief Executive Jim Hackett said on Wednesday that analysts "don't have to wait long" for Ford's South American reorganization plan.

Ford shares rose about 1 percent to $8.41 in extended trading.

(Reporting by Nick Carey and Ben Klayman; Editing by Nick Zieminski and Peter Cooney)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.