Home / Business / Ford CEO pleads for Wall Street to believe after profit miss

Ford CEO pleads for Wall Street to believe after profit miss

(Bloomberg) – Ford Motor Co., chief Jim Hackett took on Wall Street criticism that he moved too slowly and shared too little about restructuring plans and asked analysts to believe in his "thought-provoking" attitude while letting out profits as fell under estimates.

"I don't think the CEO's lifetime is something that is achieved when companies remain in tatters," said Hackett on Wednesday at a Deutsche Bank car meeting in Detroit. "What causes the thoughtful part is not a lack of initiative. It doesn't know what to do."

"What I have to do to get your trust in me and this is to continue to share evidence as thoughtfulness transforms "into results, the boss added. "We have plans to do so."

Hackett made the appeal after Ford reported preliminary earnings of $ 1.30 per share in 2018, below analysts' average forecast of $ 1.32. There are opportunities for improvements in revenue, earnings before interest and taxes and adjusted operating cash flow this year when Ford rolls out new sports vehicles and pickups, said CFO Bob Shanks.

Financial Guesswork

Some analysts were disappointed Ford did not provide specific forecasts for 2019 revenue.

"Investor resistance is likely to be tested further today," wrote Chris McNally, analyst at Evercore ISI, to customers. "Ford has basically said" your guess "to the finance industry with regard to specific financial guidance."

Ford shares fell as much as 2.6 percent to $ 8.61 in early trading. The stock fell 39 percent last year.

Ford abandons the traditional sedan market in the United States and rolls out a series of SUVs, including the newly developed Explorer, and expands its truck by reviving the mid-sized Ranger. In addition to the restructuring that Morgan Stanley estimates could lead to 25,000 job cuts, Hackett also spends a total of $ 15 billion over the next few years and develops electric and self-propelled vehicles.

"Too Casual"

Hackett, 63, said he thought analysts were "too relaxed" about how Ford is rebuilding a series that has strong SUVs, pickups, and commercial vehicles. Ford announced an alliance Tuesday with Volkswagen AG to jointly develop delivery cars and medium-sized trucks, and the two companies continue to talk about joining with autonomous and electric cars.

"We are moving right now – we have clear directions, focus, a sense of urgency," Hackett said. The CEO, who started in May 2017, said his son told him he was looking more comfortable with interviews this week's Detroit car show than last year.

Shanks, CFO, said Ford's 2018 results included a non-Kash Pretax $ 877 million loss in its global pension funds due to reduced financial markets at the end of last year. Car repair pension funds continue to be fully funded, he said.

Revenues increased 2 percent to $ 160.3 billion last year, according to Ford's slide show. Adjusted Ebit fell about 27 percent to $ 7 billion, mainly due to Ford's struggle in China and Europe.

This year Ford expects US and Chinese tariffs to reach $ 700 million, with additional costs including higher commodity prices.

Brexit disaster

Ford also keeps an eye on Britain's efforts to leave the European Union. The company has the most sold car brand in the country, which accounts for about 30 percent of its European sales. Its plans for the year adopt a so-called soft Brexit, but Shanks admitted that the situation is "very uncertain" after Parliament's vote Tuesday against the government's proposed deal.

"We urge the UK Government and Parliament to work together to avoid the country leaving the EU on a non-agreement, hard-Brexit basis on March 29," Shanks said. "Such a situation would be disastrous for the British automotive industry and for Ford's manufacturing operations in the country. "

In North America, Ford has set a" Return to 10 "target for the profit margin, which was 7.9 percent last year. To return to double figures, the company cuts an unspecified number of officials to trim

And while Ford does not see a major recovery in US car sales this year, the company expects a decline as rising interest rates and higher prices discourage some consumers.

– With the help of Adam O. Manzor and Esha Dey. [19659022] To contact the reporter on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net

To contact the red actors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Kevin Miller

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0)) – sm" type = " text "content =" For more articles like this, visit us at bloomberg.com "data-reactid =" 45 "> For more articles like this, visit us at bloomberg.com

© 2019 Bloomberg LP

Source link