New York: Ford reported a sharp drop in second-quarter earnings Wednesday and cut its full-year profit forecast, citing weakness in Europe and Asia Pacific.
The company also signaled it expects large additional costs associated with a reorganization, a move that will likely deepen questions about the automaker’s strategy.
Net income sank 47.9 percent to $1.1 billion.
Revenues fell 2.3 percent to $38.9 billion.
Ford said its performance remained strong in North America amid brisk sales for its bestselling F-Series pickup trucks.
But the second quarter was “particularly challenging” for Ford in Asia Pacific, the company said in its news release.
It trimmed its full-year profit forecast to $1.30 to $1.50 per adjusted share, down from the prior range of $1.45 to $1.70 per share.
Ford, which has been criticized by Wall Street for strategic drift, said it is taking “urgent action” to address underperformance in China.
These measures will include “aggressive fitness actions, localizing more product in China, as well as recruiting more local talent to key management positions,” Ford said.
In April, Ford surprised many analysts by announcing massive cost-cutting targets and plans to phase out many sedans in North America amid surging demand for sport-utility vehicles and other trucks.
On Wednesday Ford said a revamping of the company’s operations could result in one-time charges of $11 billion over the next three to five years.
The company also said it was postponing a September investor meeting that had been intended to update the market on its plans.
Shares tumbled 4.7 percent in after-hours trading to $10.02.
AFP