Ford Motor Co. forecast annual profit that trails analysts’ estimates as the automaker rolls out new sport utility vehicles and struggles to compete in China’s slumping car market.
Adjusted earnings will range from US$1.20 to US$1.35 a share, Ford said Wednesday, below analysts’ average estimate for US$1.39. The second-largest U.S. automaker also missed projections for second-quarter profit.
Chief Executive Officer Jim Hackett is leading an US$11 billion overhaul aimed at reversing Ford’s fortunes by cutting thousands of jobs, reviving an aging line of SUVs and pickups and ditching slow-selling sedans. The company is losing money and market share in China, where the car market is contracting for the first time in a generation.
“We’re seeing some good results in the first half of the year,” Chief Financial Officer Tim Stone said in a briefing with reporters in Dearborn, Michigan. “But there’s a lot of work to do, otherwise it wouldn’t be fun.”
New versions of Ford’s Explorer and Escape SUVs debut this year, and it’s bringing back the Bronco off-roader in 2020. The company also just struck a deal with Volkswagen AG to jointly develop electric and self-driving cars.
A drop-off in shipments of the Explorer -- which is just ramping up production -- contributed to lower earnings and shrinking margin last quarter in North America, where Ford generates the bulk of its profit.
Ford lost US$155 million before interest and taxes in China, with deliveries to dealers plunging 32 per cent in the second quarter, as the company struggles with an aging product line. The carmaker has said it’s reducing inventory and trying to boost sales by introducing new or revamped models.
Ford also suffered a US$181 million loss in its investment in the Pivotal Software firm, which caused the company to fall short of analysts’ estimates, Stone said.
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