Ford’s Net Profits Plunge 48%

Ford Motor Co. blames supplier problems in North America and competition in China for a “very tough” second quarter.

Revenue dipped 2% to $38.9 billion as wholesales dropped 10% to 1.49 million vehicles. Net income plummeted to $1.1 billion from $2 billion a year ago. Earnings before interest and taxes sagged 39% to $1.7 billion.

As did General Motors and Fiat Chrysler Automobiles earlier today, Ford lowered its outlook for 2018. The company now expects an earnings-per-share range of $1.30-$1.50, down from its previous guidance of $1.45-$1.70.

Ford has postponed a planned investor meeting in September. The company says it will wait until it can present specifics about its global efforts to realign products with the market, push into shared mobility services and reallocate resources. The company warns that effort could take five years and cost as much as $11 billion.

The company says it is aggressively attacking costs in Europe and taking “urgent action” in China to lower expenses and localize more product. Even so, the company expects to swing to a full-year loss in Europe and report “significant” red ink in Asia.

Ford describes North America as a relative bright spot in the second quarter. Even so, wholesales slid 10% to 1.49 million cars and trucks. Revenue declined 3% to $35.9 billion, and EBIT plummeted 50% to $1.2 billion.

In Europe, wholesales ebbed 2% to 367,000 vehicles, and revenue fell 6% to $7.6 billion. EBIT for the period swung to a $73 million loss that Ford warns will grow later this year.

In Asia Pacific, a struggling China operation saw sales to dealers drop 26% and revenue plunge by one-third to $2.3 billion. EBIT swung to a $394 million loss from a $167 million profit in last year’s second quarter.