Ford Hopes to Soothe Analysts, Investors

Ford Motor Co. is holding an Investor Day meeting on Wednesday in hopes of easing worries about the company’s drooping sales and declining profit forecast.

Analysts expect Ford to emphasize its efforts to develop autonomous vehicles and move into alternative transportation services such as ride sharing. Those steps haven’t yet bolstered the company's stock, which ended last week at $12.38—down 12% from this year’s peak of $14.09 in late April.

In January Ford described 2015 as a “breakthrough” year and followed it up with booming earnings and record pretax profits in the first quarter of 2016. The company predicted its full-year results would at least match last year.

But Ford reversed its guidance in late July, pointing to rising sales incentive costs, the likelihood of demand plateauing in the U.S. and an expected $1.2 billion hit over three years from U.K.’s decision to exit the European Union. The company surprised the industry with a profit warning as second-quarter income fell 9%. CEO Mark Fields cautioned that second-half results, especially in the third quarter, would be “much weaker than normal.”

Last week Ford warned that its adjusted pretax profit in 2016 will be $10.2 billion, down from the $10.8 billion it forecast earlier this year. Ford blames higher-than-expected recall costs. The company now predicts year-on-year adjusted pretax profits will drop 60% to $1 billion in the third quarter and 10% to $2.3 billion in the fourth quarter.