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Ford’s Overseas Losses Triple in Second Quarter
Ford Motor Co. expects a "substantially lower" operating profit in the quarter ending June 30 because losses at its international operations surged to an estimated $570 million (€458 million) from $190 million (€153 million) in the January-March period.
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Ford Motor Co. expects a "substantially lower" operating profit in the quarter ending June 30 because losses at its international operations surged to an estimated $570 million (€458 million) from $190 million (€153 million) in the January-March period.
Ford previously predicted that overseas losses in the second quarter would roughly match those in the first quarter. But in a filing with the U.S. Securities and Exchange Commission, the company says market conditions in Europe have "deteriorated significantly" since the beginning of 2012.
Ford also cites losses in Asia Pacific, where it is investing heavily in new factories and models, and South America, where competition and pricing pressures have intensified.
The carmaker tells reporters it is developing a new plan to deal with its structural problems in Europe, which include excess capacity. Ford isn't saying whether it might close one of its five assembly plants there.
In Europe, the company had projected pretax losses of $500 million-$600 million (€400 million-€480 million) this year, including a $149 million (€120 million) deficit in the first quarter. Ford now expects pressure on profit margins in the region for the foreseeable future, in part because industrywide overcapacity has ignited a price war.
The company continues to forecast a companywide profit and positive operating cash flow this year because of strong results in North America. Ford predicts its full-year pretax income will roughly match the $8.8 billion (€7.1 billion) it earned in 2011.
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