Mexican Media Brands
Ford Expects Lower Pretax Profits Next Year
Ford Motor Co. says the cost of introducing 23 new or revised models worldwide in 2014 more than twice this year's count will trim its pretax profit to $7 billion-$8 billion from an expected $8.5 billion for 2013.
#economics
Share
Ford Motor Co. says the cost of introducing 23 new or revised models worldwide in 2014 more than twice this year's count will trim its pretax profit to $7 billion-$8 billion from an expected $8.5 billion for 2013.
The company also predicts the surge of new products will lead to increased revenue in 2015. But the shorter-term prospect of reduced earnings triggered a 6% drop in Ford's stock price on Wednesday. It was the largest one-day decline in more than two years.
Analysts note that the flood of new models next year will put heavy pressure on Ford to avoid launch and quality problems, especially for the next-generation version of its highly profitable F-150 pickup truck.
New product costs weren't the only concern Ford raised with analysts on Wednesday. It said its profit margin this year could fall short of the company's 10% target. One reason: a bill as high as $350 million related to seven recalls of the latest, two-year-old version of its Escape SUV.
The company also anticipates slower sales growth in North America and flat profits in Asia Pacific and South America next year.
RELATED CONTENT
-
On The German Auto Industry
A look at several things that are going on in the German auto industry—from new vehicles to stamping to building electric vehicles.
-
On Global EV Sales, Lean and the Supply Chain & Dealing With Snow
The distribution of EVs and potential implications, why lean still matters even with supply chain issues, where there are the most industrial robots, a potential coming shortage that isn’t a microprocessor, mapping tech and obscured signs, and a look at the future
-
Enterprise Edges into Self-Driving Car Market
U.S. rental car giant Enterprise Holdings Inc. is the latest company to venture into the world of self-driving vehicles.