Ford Motor Co. on Thursday warned the automaker expects to lose roughly $570 million in its overseas operations in the second quarter mostly because of the Eurozone crisis, South America and Asia.
Ford’s old models in South America are facing growing competition, and the company’s losing money in Asia as it tries to build more plants and expand its offerings there. Ford is also seeing low sales and excess production capacity in Europe.
“Our operations outside of North America are under increasing pressure,” the company said in the filing.
“Our combined results for the second quarter for Ford South America, Ford Europe, and Ford Asia Pacific Africa could be a loss of about three times as much as the $190 million pretax loss incurred by these operations in the first quarter.”
The Dearborn automaker had a pre-tax loss of $190 million during the first quarter. Approximately 80 percent of those losses came from Europe alone.
Despite the weak international outlook, Ford continues to expect to post a profit in the second-quarter due to strength in North America and its financial unit.
The announcement, made after the New York Stock Exchange closed, sent Ford’s shares down 3.6 per cent to $9.73 in after-market trading.
The profit warning from Ford, a company fresh off a dramatic turnaround, reflects the increasing difficulties the global auto industry is facing outside North America.
New car registrations in the 27-nation European Union (EU) dropped 8.7 per cent to 1.107 million vehicles in May, which had one less working day than May 2011, as all major markets except the UK declined, auto industry association ACEA said in a statement.
Ford made a loss of $149m in Europe where many economies are struggling. The carmaker’s sales in Europe were down by 60,000.