Ford posts quarterly loss amid struggles in Europe, China
The automaker is in the midst of a US$11 billion global restructuring.
DEARBORN, Mich.—Ford Motor Co. has reported its first quarterly loss in two years due to a pension accounting charge and poor performances in Europe and China.
The Dearborn, Michigan, company on Wednesday said it lost US$116 million, or 3 cents a share, in the fourth quarter, compared with a $2.52 billion profit in the same period a year earlier.
The loss included an $877 million charge to revalue global pension assets due to a late-year market slide.
Excluding one-time items, the company posted a profit of 30 cents per share from October through December. That fell just short of analyst estimates of a profit of 31 cents.
The company still made $3.68 billion for the full year, about half of what it made in 2017. Without one-time items, Ford’s full-year profit was $1.30 per share, in line with the company’s recent guidance but short of Wall Street’s expectations. Analysts polled by FactSet expected $1.32 per share.
The company made a pretax profit of $7.6 billion in North America for the year, down 6 per cent from 2017. Still, U.S. unionized workers will get profit-sharing checks of $7,600 each in March.
But the automaker lost $1.1 billion before taxes in its Asia Pacific region including China for the full year. It also posted pretax losses of $398 million Europe for the year, $678 million in South America, and $7 million in the Middle East and Africa.
Revenue rose 2 per cent for the year to $160.3 billion, topping Wall Street estimates of $155.77 billion on stronger prices that customers paid for Ford vehicles, the company said.
Ford’s shares rose about 1 per cent in after-hours trading Wednesday to $8.42.
Ford is in the midst of a $11 billion global restructuring, and last week it announced plans to close factories and lay off workers in Europe.
Chief Financial Officer Bob Shanks said the company has a good handle on its underperformance in China and Europe and said it is addressing problems.
“It’s not a year that we were happy with,” Shanks told reporters. “I think the fourth quarter kind of continued in that theme.”
But he said that, although Ford suffered headwinds of tariffs and extraordinary recall costs including faulty Takata air bags, the company’s performance in North America improved.
Ford has identified areas to restructure in Europe and other regions.
“The choices that we’ve made in terms of what we’re going to do to improve the business are largely made,” Shanks said. “And now it’s down to execution and implementation.”