Ford Motor Co said on Thursday that its losses on international operations could hit US$570 million in the quarter ending this week, but would not be enough to offset profits from domestic sales.
In a filing with the US Securities and Exchange Commission, the No. 2 US automaker said it expects second-quarter pre-tax operating profits, excluding special items, “to be substantially lower than the same period a year ago.”
“We continue to expect good results for Ford North America and Ford Credit during the second quarter, but our operations outside of North America are under increasing pressure,” the statement said.
“In fact, our combined results for the second quarter for Ford South America, Ford Europe, and Ford Asia Pacific Africa could be a loss of about three times as much as the US$190 million pre-tax loss incurred by these operations in the first quarter,” it added.
The company said it was running into greater competition and pricing challenges as well as weakening currencies in South America.
Europe’s turn into recession has hit sales there, biting into its margins, Ford said.
“We are impacted by the serious economic crisis, compounded by an intensifying competitive environment as manufacturers react to lower consumer demand and excess production capacity,” it added.
In its Asia-Pacific, Africa division operations are better, but Ford said it was “not yet fully realizing the associated revenue of new products and facilities.”
“While our volume is up in the region, our investment and growth costs are rising faster for now. For the full year, we continue to expect to be solidly profitable,” it added.
Separately, Chrysler’s top sales executive said US auto sales will slow a bit this month from the pace earlier this year, but he expects a rebound in the second half of the year.
Reid Bigland, head of sales for Chrysler and chief executive officer of Dodge, also expects a strong June for his company, with an increase of around 18 percent as long as Chrysler does well in the final days of the month. All automakers report US sales for this month on July 3.
Auto sales have been a bright spot in the economy. They were running at an annual pace of around 14.5 million from January through April. However, last month, the rate slowed to 13.8 million, which companies and analysts blamed on a slight rise in unemployment, stock market gyrations and falling consumer confidence. Many analysts predict this month’s sales will come in at an annual pace below 14 million for the second straight month.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to