Ford Motor Company (F)

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Ford keeps expectations for the year under wraps
By: MarketWatch | January 24, 2019

North America, credit businesses are bright spots for Ford

Ford Motor Co. late Wednesday claimed it kicked off 2019 “with a clear vision,” but kept its expectations for the year under wraps as it reported a surprise fourth-quarter loss.

Ford F, +3.52% said it lost 3 cents a share in the fourth quarter, compared with a loss of 66 cents a share in the year-ago quarter. The loss included a $900 million non-cash hit mostly related to its pension plans.

The auto maker had forecast weaker fourth-quarter earnings when it reported preliminary numbers last week, taking some of the sting from Wednesday’s news.

“Investors were really more focused on 2019 expectations particularly after (General Motors Co.) gave a fairly rosy outlook for the U.S. and China markets a couple of weeks ago, but specifics in the release were fairly scant,” said Garrett Nelson, an analyst with CFRA.

In the call following results, Chief Executive Jim Hackett said the company will be sharing more specifics about its turnaround plan “in the coming months,” but such announcements have to come in a “coordinated way” as Ford works with its several stakeholders.

Adjusted for one-time items, Ford reported earnings of 30 cents a share, versus a loss of 9 cents a share in the year-ago quarter, thanks mostly to the strength of its North America business. Revenue rose 1% to $41.8 billion thanks to an “improved mix and higher net pricing,” Ford said.

Analysts polled by FactSet had expected GAAP earnings of 27 cents a share and adjusted earnings of 31 cents a share on sales of $38.6 billion for the auto maker.

“We have consistently laid the foundation for the global redesign of our business, clearly investing to sharpen our competitiveness so we can better serve customers and invest for the future,” Hackett said in the statement accompanying the results. “Ford enters 2019 with a clear vision, a solid plan, and we are now in execution mode.”

North America was the bright spot for Ford’s yearly adjusted earnings as well, with China and Europe weighing it down.

All regions “continued to focus on improving operational fitness while building on core company strengths,” the company said, highlighting Europe’s record SUV sales, record full-year sales in India and Thailand, and a fourth straight year of sales record for its Lincoln brand in China.

Ford says its balance sheet remained “strong,” with $23.1 billion of cash and $34.2 billion of liquidity in hand.

Ford’s Chief Financial Officer Bob Shanks said in the note the company expects to be able to fully fund its business needs and capital plans this year maintaining cash and liquidity levels at or above targets.

The company’s mobility unit records a loss of $195 million, compared with a loss of $95 million a year ago, thanks to “planned” investments and driverless-car business development, Ford said.

The company’s credit arm was another bright spot, earning $663 million, compared with $53 million a year ago.

Shares of Ford have lost 30% in the past 12 months, compared with losses of 7% and 6.2% for the S&P 500 index SPX, +0.60% and the Dow Jones Industrial Average. DJIA, +0.68%

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