Ford Motor Co. expects the challenges that dragged down earnings for at least half of last year to stretch into 2019 but says its financial performance will improve, regardless.
The automaker, which is in the midst of an $11 billion restructuring effort that includes layoffs, is “sharpening our competitiveness, taking actions to improve our profitability and returns, and investing in our future,” CEO Jim Hackett said at a Detroit conference on Wednesday.
Ford reiterated a projection that 2018 earnings would be as much as $1.30 per share for 2018, in line with prior guidance, though it said fourth quarter earnings will be weaker than expected. Ford’s profit fell 48 percent in the second quarter of 2018, followed by a 37 percent drop in the three months through September.
Raw-material costs — which have increased as a result of President Trump’s double-digit tariffs on steel and aluminum imports — will remain at high levels this year while global sales stagnate amid slowing growth, executives said.
Despite the challenges, CFO Bob Shanks expects improved revenue and profit, along with ample cash flow.
“Our imperative to sustain an investment-grade rating and a strong balance sheet remains the foundation of our business,” he told attendees. “For 2019, we expect to be able to fully fund our business needs, while maintaining cash and liquidity levels at or above our target levels.”
The company plans to refresh 75 percent of its North American lineup, with a focus on pick-ups and sport utility vehicles. In China — the world’s most lucrative auto market and one where Ford is suffering from slowing sales — it plans to “improve cost structure and improve relationships with partners.” The firm will introduce 10 new Ford and Lincoln products in the country in 2019.
On Tuesday, Ford announced a global alliance with Volkswagen AG focused on developing commercial vans and medium-sized pickups, as well as autonomous vehicles.
Its stock fell 6.2 percent to $8.29 in New York trading on Wednesday.
