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Home / Business / Why Ford's Operating Result Decreased 28% in 2018 – The Motley Fool

Why Ford's Operating Result Decreased 28% in 2018 – The Motley Fool



The Ford Motor Company (19659002) (NYSE: F) posted a loss of $ 116 million in the fourth quarter. However, the company stated that operating income for the fourth quarter, excluding pension costs and other one-off items, declined 28% year-on-year to $ 1.5 billion. Ford's non-recurring operating income also decreased 28% to $ 7 billion.

On a stand-alone basis (excluding line items), Ford earned $ 0.30 in the fourth quarter and $ 1.30 for the full year. Both had fallen from Ford's results a year ago, reflecting the preliminary figures Ford had released last week.

  A black 201<div class="e3lan e3lan-in-post1"><script async src="//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"></script>
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</script></div>9 Ford F-150 Limited, a full-size, high-quality pickup truck parked at a marina.

Ford sold again in 2018 in the United States many F-Series pickups for good prices. These gains helped Ford overcome the challenges in other parts of the world. Source: Ford Motor Company.

Ford Profit: The Rohzahlen

Metric Q4 2018 Change from Q4 2017 Change from 2017 Change from 2017
Sales $ 41.8 billion Dollars 1.2% 160.3 billion US dollars 2.2%
Wholesale shipments 1.474.000 (15.7%) 5,982,000 [19659012] Adjusted EBIT $ 1.46 billion (28.2%) $ 7 billion (27.5%)
Adjusted EBIT margin 3.5 % (1.4 percentage points) 4.4% [19659013] (1.7 ppts)
Special items (before taxes) ($ 1.18 billion) 1, $ 33 billion lower ($ 1.43 billion) $ 1.14 billion lower
Net Income (Loss) ($ 116 million) $ 2.64 billion USD lower $ 3.68 billion (52.5%)
Adjusted operating cash flow $ 1.5 billion (32%) [19659012] (2.8%). 19659013] (33%)
Adjusted earnings per share 0.30 USD [1 9659013] (23%) 1.30 USD (27%)

Data source: Ford Motor Company. Wholesale shipments are rounded to the nearest thousands. "Adjusted" numbers exclude the effects of one-off items. EBIT = earnings before interest and taxes. Ppts = percentage points.

Ford's Fourth Quarter in Brief

Overall, Ford has sold a richer vehicle mix at better prices than in the fourth quarter of 2017. But higher raw material costs, recall the cost of the ongoing Takata airbag and losses on Ford's Chinese joint ventures (which saw a sharp decline in sales) more than made up for the good news.

Ford also had to accept a one-time charge of $ 877 million after the stock market in December ended the year with significant paper losses in its bond portfolios. This charge was the reason for Ford's net loss in the fourth quarter.

How Ford's Businesses Developed

The following describes how Ford's separate businesses behave. Note that all financial results in this section are reported on an EBIT basis unless otherwise stated.

North America: Ford earned $ 2 billion in North America in the fourth quarter, compared to $ 1.8 billion a year ago Improvements in the product mix it sold (more SUVs and trucks compared to Passenger cars) and net prices were sufficient to offset higher raw material costs and recall costs. Ford's EBIT margin in North America was 7.6%, compared to 7.3% a year ago.

For the full year, Ford earned $ 7.6 billion in North America, compared to $ 8.1 billion in 2017.

South America: Ford lost in the fourth quarter in South America 199 Million dollars, about $ 10 billion less than a year ago. Ford achieved substantial net price gains (an improvement of $ 270 million year-on-year), but was more than offset by weaker local currencies and inflationary effects.

For the full year, Ford lost $ 678 million in South America, an improvement of $ 75 million compared to 2017.

Europe: Ford lost in the fourth Quarter $ 199 million, a decrease from a profit of $ 89 million in the same period last year. Once again, Ford was able to achieve price gains through several new products, which were more than offset by unfavorable exchange rate fluctuations and higher costs, including the cost of introducing the new Focus in the region

Lost for the full year Ford in Europe $ 398 million, compared to a profit of $ 367 million in 2017.

Middle East and Africa: Ford here lost $ 49 million in the fourth quarter This is an improvement of $ 17 million year-on-year. Lower costs and price gains made up the improvement.

For the full year, Ford 2018 lost only $ 7 million in the region, a significant improvement over the loss of $ 246 million it had released a year ago.

Asia Pacific: Ford lost $ 381 million in the fourth quarter, compared to $ 30 million in the same period last year. The results of this region include Ford's joint ventures in China and activities in India, Southeast Asia and Oceania. The story in the fourth quarter: China went bad, the rest good. Ford lost $ 534 million in China, while the rest of the region earned $ 153 million.

For the full year, the region lost $ 1.1 billion, a $ 1.54 billion loss in China and a $ 444 gain in the rest of the region.

Mobility: Ford's mobility segment, which includes autonomous vehicle efforts and Ford Smart Mobility initiatives, lost $ 195 million over $ 100 million in the fourth quarter US dollars last year. The story is simple: Ford has increased its spending on both fronts.

Throughout the year, Mobility posted a $ 674 million loss compared to a $ 299 million loss in 2017.

Ford Credit: Ford's auto finance profit before tax was $ 663 million in the fourth quarter, compared to $ 610 million a year ago. Ford expects much of the improvement to be "low-end lease payments" – Ford's off-lease vehicles receive good prices at used-car auctions.

For the full year, Ford Credit earned $ 2.63 billion, compared to $ 2.31 billion in 2017

  A 2019 blue Ford Focus ST, a sporty hatchback, on a European road.

The cost of launching a completely new Focus impacted Ford's results in Europe in 2018, but should help make Ford 2019 perform better. Source: Ford Motor Company.

About These Big One-Time Allegations

Ford made one-time charges totaling $ 1.179 billion in the fourth quarter. As mentioned earlier, most of this – $ 877 million – was made up of non-cash costs related to Ford's annual pension adjustment. The remainder included $ 262 million in resigning employee fees and a $ 40 million fee. Dollars for the closure of the Ford Chariot shuttle bus.

Debt, Liquidity and Guidelines

Ford ended the year 2018 with $ 23.1 billion in cash available to its automotive business compared to $ 26.5 billion at the end of 2017. It had additional credit lines of 11.1 billion. for a total liquidity of 34.2 billion US dollars. In contrast, well-structured long-term debt was $ 14.1 billion, compared to $ 16.5 billion at the end of 2017.

Ford did not change its guidance on January 16.


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