Ford Motor Co on Tuesday forecast financial results for last year and this year that fell short of investor expectations, in a downbeat forecast that contrasted with a more positive outlook from rival General Motors Co (GM).
Ford shares dropped more than 2 percent in extended trading after it released its forecast, but then recovered most of the losses.
Ford said it would pay shareholders a US$500 million, or US$0.13 a share, extra dividend for the first quarter. It said that including that extra payout, it expects to distribute about US$3.1 billion in dividends for all of this year.
Photo: Reuters
The differing outlooks from GM and Ford highlighted how the two largest US automakers have been on diverging roads for the past year.
GM chief executive Mary Barra has led a dramatic overhaul of the No. 1 US automaker, selling its unprofitable European operations, exiting troubled Asian markets, and giving the green light to investments in self-driving vehicles and an expanded portfolio of electric vehicles.
GM projected this year’s results in line with the US$6 to US$6.50 a share adjusted earnings projected for last year, and promised higher profit next year.
The company’s shares closed up slightly, after a gain of about 2 percent earlier in the day.
The stock has advanced 18 percent from a year ago.
Ford shares are up only about 4 percent from a year ago. In May, Ford’s board ousted then-chief executive Mark Fields and installed former Steelcase Inc CEO Jim Hackett as chief executive.
Hackett has promised to slash the company’s product development costs by US$14 billion and has launched reviews of the automaker’s vehicle lineup.
Ford’s forecast reinforces a caution Hackett gave investors last fall, when he said the cost-cutting and product strategy changes could take time.
For last year, Ford said adjusted earnings would be US$1.78 per share, below analysts’ estimate of US$1.83, according to Thomson Reuters I/B/E/S.
For this year, Ford expects adjusted earnings of US$1.45 to US$1.70 per share. Analysts on average expected earnings of US$1.62.
In a nod to the importance investors are placing on investments in alternatives to traditional auto manufacturing and sales, Ford said it would start reporting separately the results of its investments in “mobility” businesses, such as self-driving delivery vehicles and ride services, and previewed a loss for those operations of US$300 million for last year.
Ford blamed exchange rates and rising prices for the commodities used in its vehicles for the projected decline in this year’s adjusted earnings.
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