Ford Swings to a Loss, Misses Analysts' Profit Estimates

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 [e-mail]

(END) Dow Jones Newswires

January 23, 2019 16:35 ET (21:35 GMT)

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