Ford’s shares are down in after-hours trading despite its second quarter earnings beat after restructuring charges.
Ford.com
Ford Motor Co reported better than expected second quarter earnings, but its shares are falling in after hours trading due to a bearish forecast for the rest of the year.
For the first half of the year, Ford reported a pre-tax profit of $4.1 billion, meaning that the company, based on full-year earnings projections, will deliver a weaker pre-tax profit of $3.4 billion for the second half of 2019.
The No. 2 U.S. automaker posted a second-quarter net profit of $148 million, or 4 cents per share, down from $1.1 billion, or 27 cents per share, a year earlier. The falloff is due to restructuring costs and slowing business in Europe and China.
Shares are down 7% in after-hours trading,
In April, Ford said it planned to launch more than 30 new models over the next three years to overhaul its vehicle lineup in China.
Last month, Ford said it would cut 12,000 jobs globally, close five plants and cut shifts at other factories in Europe by the end of next year in an effort to return that region to profitability.
Meantime, restructuring notwithstanding, Ford is minting money selling pickup trucks and SUVs with rising transaction prices, especially for the F-Series pickups–over $46,000. Ford may not have a legitimate “luxury” brand, but the company’s truck business sells like one.
Ford is also getting ready to launch an all-new Explorer SUV, too, and that much improved model should make up for some lost traction at the dealership.
Ford’s restructuring reflects in part that it is getting out of the passenger car business–ceasing production of Ford Focus, Fiesta, Taurus and Lincoln sedans, with the cutoff of the Fusion sedan coming down the line.
Trimming staff and models, and aligning the company to focus on trucks, SUVs and a future of more electric vehicles.
Because of the enormous capital investments required to scale up EVs and develop autonomous vehicle technology, Ford has tied up in an alliance with Volkswagen to share costs that are not related to brand-specific differentiation between model lineups.
The two companies are also helping one another in areas of weakness; VW will help Ford with smaller commercial vehicles in Europe and Ford is helping VW with pickup trucks outside of North America.
