Ford Motor announced that the cost of launching new vehicles and a deteriorating Venezuelan economy would dent its profit next year, news that sent the No. 2 U.S. automaker’s shares to their biggest one-day percentage drop in more than two years.
The company said its mid-decade target for a global automotive profit margin of 8 to 9 % was also at risk. Analysts worried about the company’s pricing next year in its core U.S. market, which Ford said would be “slightly unfavorable.”
Ford expects a global pretax profit next year of between $7 billion and $8 billion. That is lower than the projected $8.5 billion expected in 2013, which is set to be one of the most profitable in the company’s 110-year history, Ford said. Much of that amount – about $8.34 billion – is estimated to come from North America. It was the first time Ford has provided its forecast for 2014 results.
A major expense next year for Ford will be a record 23 global product launches, which show a commitment to future expansion and preparation for “profitable growth.” That compares with 11 launches this year. Product launches will have more of a financial impact in the second half of 2014 than in the first half. The company did not say how much the launches would cost.
In Europe, Ford expects the overall market to improve. Once it gets beyond its restructuring expenses of $400 million in 2013 and 2014, the company expects to be profitable on the continent, which has been a damper on its earnings over the past several years.
by Aurel Niculescu
) - Thursday, December 19th, 2013 - filed under Ford
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