Ford has lowered its 2014 pre-tax profit outlook to US$6bn (excluding special items) citing higher warranty costs and weakening total industry volume in Russia and South America.
The company also said it expects its North American operating margin at the lower end of its 8%-9% guidance range, and better results in Europe, Asia Pacific and Ford Credit, compared to 2013.
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Ford also said that this year will continue to serve as a “critical building block” in the One Ford plan and is on track to launch a “record 23 vehicles in preparation for a more profitable 2015”.
Ford forecast its 2015 pre-tax profit to be in the US$8.5bn to US$9.5bn range, excluding special items.
The company expects 2015 revenue and operating margin to be higher than 2014.
Europe, which Ford previously said would return to profitability in 2015, is now expected to lose about US$250m next year because of continued volatility in Russia and higher pension expenses as a result of lower interest rates.
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By GlobalData“In 2015, we’ll take the next step in our long-term plan that calls for all parts of the Ford business to contribute to overall profitability,” said Bob Shanks, Ford executive vice president and chief financial officer. “Although we face a variety of challenges as we approach 2015, we are well positioned for long-term growth in all areas of the business.”
Ford’s profit warning caused the company’s share price to drop sharply in late trading yesterday.
