All three of Detroit’s big car makers cut their 2018 profit forecasts. Ford joined General Motors Co. (NYSE:GM) and Fiat Chrysler Automobiles NV (NYSE: FCAU) in lowering forecasts for 2018, making Wednesday one of Detroit's worst days since the depths of the global financial crisis that sent two of the town’s traditional car-making giants into bankruptcy.
Ford cut its earnings guidance to US$1.30 to US$1.50 per share for 2018, down from a previous forecast of US$1.45 to US$1.70.
Bob Shanks, its chief financial officer, said he expects Ford's input price to be US$500mln-$600mln higher this year as a result of steel and aluminum tariffs. He also put the impact from Chinese tariffs at US$200mln for the full year.
“Outside of North America, it was a particularly challenging quarter for Asia Pacific and Europe. And due to those regions Ford is now lowering the range for full year 2018 adjusted earnings per share guidance,” the automaker said in a statement. It gave few details.
Ford said it expects adjusted earnings could drop as low as US$1.30 a share, from an earlier projection for as much as US$1.70. The Dearborn, Michigan-based company’s Asia Pacific and Europe operations lost a combined $467mln in the second quarter.
Ford’s profit margin for the quarter was 2.7%, down from 5.1% a year earlier. Its North American margin declined to 7.4% from 9.5% in the second quarter of 2017.
Shares fell as much as 5.1% in New York, after regular trading. Ford had dropped 16% this year as of Wednesday’s close.