Ford Motor Co. (F, Financial) released its fourth-quarter earnings after the market closed on Jan. 23. While the company missed quarterly earnings projections owing to pensions and layoff costs, its revenue met expectations.
The Detroit-based automaker struggled to grow its sales across the globe. While it did see sales growth in North America, it continued to struggle in Asia, Europe and South America.
By the numbers
The Blue Oval reported adjusted earnings of 30 cents per share, just shy of estimates of 32 cents. Revenue of $41.8 billion grew from $41.3 billion in the year-ago quarter. Automotive segment revenue of $38.7 billion topped expectations of $36.88 billion.
For the full year, the company posted adjusted earnings before interest and taxes of $7 billion, or $1.30 per share. Revenue for 2018 surged 2% to $160.3 billion. Ford noted that tariffs adversely affected the company’s revenue by $650 million, while higher commodity prices reduced its bottom line by $1.1 billion.
In a statement, Chief Financial Officer Bob Shanks commented on Ford's performance.Â
"While 2018 was a challenging year, we put in place key building blocks to build a more resilient and competitive business model that can thrive no matter the economic environment," he said.Â
The company’s balance of cash and cash equivalents at the end of the quarter was $16.7 billion.
Segment detail
In North America, revenue stood at $25.8 billion, an increase of $1.7 billion increase year over year. Wholesale volume plunged to 738,000 units. On the other hand, EBIT rose to $2 billion as a result of favorable mix and higher net pricing.
Revenue in Europe inched up $700 million year over year to $7.4 billion, while wholesale volume declined 55,000 units to 361,000 units. The company saw a pretax loss of $199 million on account of lower volume, high costs and currency fluctuations.
In South America, Ford's revenue plummeted $500 million to $1.2 billion. Furthermore, the automaker incurred a pretax loss of $199 million. Wholesale volume came in at 89,000 units.
In the Middle East and Africa, revenue amounted to $700 million, which reflected a $100 million decline from the year-ago quarter. Wholesale volume dropped to 32,000 units. This segment registered pretax loss of $49 million.
In the Asia-Pacific region, revenue dipped $200 million to $3.6 billion, wholesale volume was 254,000 units (down by 198,000 units) and the pretax loss amounted to $381 million.
Plans
The company is now focusing on resizing and restructuring its worldwide salaried workforce while simultaneously adding new equipment to aid product development.
Ford is executing a restructuring plan that involves a total investment of $11 billion toward new mobility technologies and realignment of its portfolio around lucrative vehicles. The company is depending on trucks, utility vehicles and muscle cars, which have been its prime source of revenue. At the recent Detroit auto show, the company introduced a rejuvenated edition of its top-selling Explorer SUV and said it is widening its portfolio of Mustang vehicles. .
Disclosure: I do not hold any positions in the stocks mentioned.
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