Ford Motor Co. (F, Financial) released its second-quarter results on July 24 after the market closed. Ford posted a steep decline in its quarterly profits owing to heavy expenses in its global restructuring program.
By the numbers
The Michigan-based automaker recorded adjusted earnings per share of 28 cents, which did not live up to Wall Street’s estimates of 31 cents. Automotive revenue was $35.76 billion, topping expectations of $35.07 billion.
The company’s net income slid to $148 million, down from $1 billion reported in the prior year. The company attributed the drop to a charge exceeding $1 billion associated with shutting down its plants as well as layoffs in Europe and South America, where the company commenced restructurings.
Segment details
In North America, the company recorded operating profit of $1.7 billion. Ford attributed the strong performance to solid demand for F-Series trucks as well as Ranger pickups.
Operating loss during the reported quarter was $205 million in South America, $45 million in Middle East and Africa, and $155 million in Greater China. The loss in China was an improvement of $328 million year over year, though.
Investments
Amid the changing industry, Ford plans to invest $11 billion in electric and hybrid cars by 2022. In a statement, CEO Jim Hackett said: “Midway through this key year of action, we are pleased with the progress we are making toward creating a more dynamic and profitable business ... In this time of profound change in our industry, Ford has amazing opportunities to delight customers, innovate and collaborate in new ways, and create value.”
Phasing out sedans
In the first half of the year, the company trimmed sedan sales to build a strong SUV and truck lineup. Since sedans are being phased out slowly, the onus is on Ford’s Ranger and EcoSPort to compensate for the loss in sales.
Looking ahead
This year, Ford will roll out new editions of its Explorer and Escape. The company projects 2019 earnings per share will be between $14.75 and $15.50.
Disclosure: I do not hold any position in the stock mentioned.
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