Mexican Media Brands
Ford Cuts Pretax Profit Forecast
Ford Motor Co. tells investors it expects to report a pretax profit of $6 billion in 2014, short of the $7 billion-$8 billion it expected.
#economics
Share
Ford Motor Co. tells investors it expects to report a pretax profit of $6 billion in 2014, short of the $7 billion-$8 billion it expected. The announcement prompted a 7% drop in the closing price of Ford shares on Monday.
The company says it adjusted its forecast downward because of an estimated $1 billion in recall costs, deteriorating markets in South America and softer-than-expected sales in Europe, especially Russia.
Ford forecasts revenue will be flat at around $139 million, as an upturn in North America is offset by big losses elsewhere. The company now expects to lose $1 billion in South America with only moderate relief in 2015. It anticipates a loss of $1.2 billion in Europe this year and $250 million in 2015.
In the longer term, Ford expects its annual global vehicle sales will expand as much as 55% to 9.4 million units by 2020. Over the same period the company anticipates its operating margin will reach 8% with revenue growth greater than 5%.
Ford also forecasts that worldwide demand for its Lincoln luxury cars will triple to 300,000 by the end of the decade. The company says sales will be driven by two new models and a big push in China.
RELATED CONTENT
-
Ford’s $42 Billion Cash Cow
F-Series pickups generate about 30% of the carmaker’s revenue. The tally is about twice as much as what McDonald’s pulls in.
-
On Urban Transport, the Jeep Grand Wagoneer, Lamborghini and more
Why electric pods may be the future of urban transport, the amazing Jeep Grand Wagoneer, Lamborghini is a green pioneer, LMC on capacity utilization, an aluminum study gives the nod to. . .aluminum, and why McLaren is working with TUMI.
-
China and U.S. OEMs
When Ford announced its 3rd quarter earning on October 24, the official announcement said, in part, “Company revenue was up 3 percent year over year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China.” The previous day, perhaps as a preemptive move to answer the question “If things are going poorly in China, what are you doing about it?, Ford announced that it was establishing Ford China as a stand-alone business unit.