Ford Projects Lower Operating Profit -- WSJ
January 17 2018 - 03:02AM
Dow Jones News
By John D. Stoll
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 17, 2018).
Ford Motor Co. said Tuesday it expects lower operating profit on
an earnings-per-share basis in 2018, with higher commodity costs
and adverse exchange rates offsetting gains from cost-cutting
efforts and continued demand for high-margin pickup trucks.
The auto maker doesn't plan to take financial charges related to
U.S. tax reform. General Motors Co. earlier on Tuesday said it
would book a $7 billion write-down due to reflect the loss in value
of tax-deferred assets held on its balance sheet.
The Dearborn, Mich., auto maker said 2017 net income equaled
$1.95 per share, and operating income equaled $1.78 per share, an
improvement compared with the prior year. It expects 2018 operating
income to fall to a range of between $1.45 per share and $1.70 per
share.
The company also sees Ford Credit lending arm earnings
decreasing this year due to higher interest rates. Prices of
metals, such as steel and aluminum, are hitting the company
particularly hard.
The results and outlook cap Chief Executive Jim Hackett's
initial months at Ford's helm. Mr. Hackett, hired to replace
longtime Ford executive Mark Fields, has been charged with cutting
costs, sharpening the auto maker's approach to future technology
and revitalizing the corporate culture.
At this week's Detroit auto show, Ford rolled out new components
of Mr. Hackett's plan. Executives committed to boost spending on
electrified vehicles to $11 billion in capital spending,
engineering and other costs in the years spanning 2015 to 2022. The
company will unveil its first long-range electric SUV by 2020,
several years after Tesla Inc. and General Motors Co. started
selling electric cars capable of driving several hundred miles on a
charge.
The company is shifting $500 million in annual spending from
conventional gasoline or diesel cars to electrified vehicles.
Ford is also planning to shift $7 billion of investment into
trucks and SUVs, two segments that are fast growing and deliver
disproportionate profits to auto makers.
Write to John D. Stoll at john.stoll@wsj.com
(END) Dow Jones Newswires
January 17, 2018 02:47 ET (07:47 GMT)
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