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Shares of Ford plunged on Wednesday after the automaker reported underperformance in the second quarter and released disappointing forecasts for the year.
Ford, which has cut thousands of jobs this year, is also investing $ 11 billion by 2022 in electric and hybrid vehicles to keep pace in a rapidly changing industry.
"In the middle of this year of decisive action, we are delighted with the progress we are making to create a more dynamic and profitable business," said Managing Director Jim Hackett in a statement. "In this time of profound change in our industry, Ford offers incredible opportunities to delight customers, innovate and collaborate in new ways and create value."
But stocks fell sharply, down more than 6% in prolonged trading. Investors were hopeful about Ford's actions and had increased their stock by more than 34% from the beginning of the year until Wednesday.
Here's what the company reported versus Wall Street badysts' expectations, based on Refinitiv's average estimates:
- Adjusted earnings per share: 28 cents per share, compared to an estimate of 31 cents per share
- Automotive revenues: 35.76 billion US dollars against 35.07 billion US dollars
The automaker said net profit in the second quarter fell to $ 148 million, or 4 cents a share, mainly due to restructuring efforts in Europe and South America. Excluding these expenses, Ford earned 28 cents per share, which was less than the 31 cents expected by badysts.
These results include a loss resulting from a company investment in Pivotal Software. Excluding this item, Ford would have earned 32 cents per share, announced the company.
Total revenue fell to $ 38.85 billion, up from $ 38.92 billion a year ago, and auto sales at $ 35.76 billion, exceeding $ 35.07 billion.
Ford's profits in the second quarter came mainly from North America. The company posted a slight profit in Europe, but a loss in China.
Second-quarter sales in China fell 21.7%. Ford said its team in China had taken steps to stabilize sales and "aggressively" reduced inventory, which ended the quarter at its lowest level in the last 18 months, the company said.
Ford is now expecting to earn between $ 1.20 and $ 1.35 per share, on an adjusted basis, in 2019, up from $ 1.30 per share a year earlier. It was the first time Ford had released its earnings guidance for the year, but it was below the $ 1.39 per share expected by badysts polled by Refinitiv.
Correction: Ford gained 28 cents per share in the second quarter, which is lower than badysts' estimates. A previous version of this story excluded the loss of an investment in Pivotal Software.
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