Ford says commodities hurt results, more pain ahead in 2018


DETROIT (Reuters) – Ford Motor Co (F.N) on Wednesday posted a lower-than-expected quarterly net profit, hurt by rising commodity costs and unfavorable currency exchange rates, and said it expects more pain to come from higher raw material prices in 2018. Ford has been alone among the major automakers in warning that higher prices for metals like aluminum and steel will take a bite out of earnings, and last week its shares took a dive after executives said they could cost the company $1.6 billion in 2018. Speaking to reporters at Ford’s suburban Detroit headquarters, Chief Financial Officer Bob Shanks spoke of a lack of fitness at the No. 2 U.S. automaker, which meant that higher commodity costs stood out more than at rival companies that are hitting their numbers. “We have to be far fitter than we are, regardless of what the future is,” Shanks said. FILE PHOTO: Visitors look at cars in the Ford booth at the North American International Auto Show in Detroit, Michigan, U.S. January 15, 2018. REUTERS/Jonathan Ernst/File Photo Ford’s fourth-quarter results were driven almost entirely by North America, which accounted for $1.6 billion out of $1.7 billion of pre-tax profits. The company sold more expensive and profitable vehicles, mainly pickup trucks and SUVs, in North America than in other markets. CFO Shanks said that around two thirds of the $400 million currency exchange hit the company took in the quarter was related to Brexit in Europe. Ford reported quarterly net income of $2.41 billion or 60 cents per share, versus a loss of $781 million or 20 cents per share a year earlier. Adjusted for one-time items, Ford reported earnings per share of 39 cents. On that basis, analysts had on average expected earnings per share of 42 cents. Reporting By Nick Carey, additional reporting by Paul Lienert; Editing by Tom BrownOur Standards:The Thomson Reuters Trust Principles.
Source: Reuters