posted a stable operating profit and disappointing earnings outlook in the second quarter, but maintained its guidance for improved profitability this year as strong losses in Remove overseas.  The company's shares traded off-the-floor as the quarterly results and full-year earnings guidance fell short of analysts' expectations.
Ford reported operating profit of $ 1.7 billion for the period April-June, driven by strong sales and pricing for pickups and sport utility vehicles in the US home market. Another sign of some early progress in the turnaround strategy of Chief Executive Jim Hackett was that the company also drastically cut losses in China and made a small profit in Europe.
Ford's one-time adjusted earnings per share were 28 cents, lower than the Wall Street analyst's 31
Net income also decreased to $ 148 million from $ 1.1 billion a year earlier. The decline is largely due to over $ 1 billion in fees due to plant closures and redundancies in Europe and South America, where Ford has recently undergone extensive restructuring.
Ford shares fell nearly 7% on Wednesday after close. The stock rose 35% this year due to improved financial results and progress on a global restructuring plan to restore the profitability of overseas money losing business.
Ford said earnings per share for 2019 would be $ 1.20 to $ 1.35, below $ 1.40, according to analysts' average estimate. Operating income is expected to be between $ 7 and $ 7.5 billion this year, compared to $ 7 billion a year ago. Ford had previously expected an improvement, but did not set a range.
Second quarter revenue remained unchanged at $ 38.9 billion. After about two years, Mr. Hackett has devised a turnaround plan that shows some successes. The company announced that the operating profit of its automotive business has increased by two quarters for the first time in a row for more than three years.
Ford is expanding its offering to include more trucks and sport utility vehicles, while smaller, less profitable car lines in the US and other markets. It will also reduce its presence in Europe and South America to focus on higher-margin categories such as commercial vehicles and pick-ups.
Ford reduced losses in China from $ 483 million a year ago to $ 155 million. The company has seen a decline in its market share in the world's largest car market over the last two years. This is mainly due to a tired product range, as current and former executives said.
In the second quarter, Ford's China business recovered from the luxury brand Lincoln, which rose 7% in a declining market and benefited from lower import duties compared to the previous year. The company also said it is expressing more cost savings from its China business as it tries to return to profit.
Ford's Europe business rose to operating income of $ 53 million, after a loss of $ 73 million a year ago, as stronger sales Sales of vehicles to commercial buyers helped offset higher regulatory costs. Join the following conversation.