Ford Motor (F
9.98, -0.54, -5.13%)) is down after reporting weaker than expected earnings and
lowering its guidance for the fiscal year.
The automaker reported below-consensus second quarter earnings of $0.27 per share on a 2.8% year/year decline in revenue to $35.90 bln, which was ahead of expectations. Going forward, the company expects that earnings for the fiscal year will be between $1.30 per share and $1.50 per share, down from the previous forecast for earnings between $1.45 and $1.70 per share. The lowering of Ford's guidance was driven by expected challenges in European and Asia-Pacific markets.
The company announced that its investor meeting will be rescheduled from September to a time when more specifics can be provided on global redesign and restructuring. Ford expects that these efforts could boost earnings before interest and tax by $11 bln over the next three to five years.
Ford's adjusted EBIT declined 39.3% year/year to $1.70 bln. Adjusted EBIT margin declined by 270 basis points to 4.3%. Cash flow from operating activities declined 12.3% to $5.00 bln.
The company's revenue decline was driven by a 9.6% drop in wholesale volume to 1.493 mln units.
Looking at the segment breakdown, North America revenue declined 3.3% to $23.70 bln with wholesale volume falling 8.1% to 742,000. The company's market share worsened by 30 basis points to 14.1%. Earnings before Interest and Tax declined 25.0% to $1.80 bln.
South America revenue was little changed at $1.50 bln while wholesales increased 3.2% to 96,000. Regional market share declined by 50 basis points to 8.6%. Loss before interest and tax totaled $178 mln, worsening by $1 mln year/year. Volume growth took place due to industry growth while positive market factors offset the impact of exchange, commodities, and other inflationary costs.
Europe revenue grew 7.0% to $7.60 bln while wholesales fell 2.1% to 367,000. Market share declined by 20 basis points to 7.0% and the company reported a loss before interest and tax of $73 mln, down from a profit of $122 mln one year ago. Higher costs and unfavorable exchange rates were responsible for the weakness.
Middle East & Africa revenue grew 33.3% to $800 mln while wholesales grew 12.5% to 27,000. Market share declined 90 basis points to 2.5%. Earnings before interest and tax totaled $49 mln, up from a loss of $49 mln one year ago.
Asia-Pacific revenue declined 32.4% to $2.30 bln while wholesales fell 25.9% to 261,000. Market share worsened by 100 basis points to 2.7%. Loss before interest and tax totaled $394 mln, down from a profit of $167 mln reported one year ago. Weakness in the segment was driven by unfavorable volume and mix and lower net pricing in the company's operations in China.
Ford Credit reported earnings before tax of $645 mln, up 4.2% year/year. The Mobility Segment reported a loss of $181 mln, reflecting increased investment in mobility services and autonomous vehicle development.
- OUR VIEW
- LEARNING CENTER