Ford’s 2017 profits veer downhill, analysts call future strategy “vague”

By HUB SmartCoverage Team on January 18th, 2018

Ford Motor Co.’s turnaround plans have not been successful, following reports gleaned from their 2017 sales numbers.

“At an investor conference in Detroit late on Tuesday, Ford estimated 2017 earnings per share well below analysts’ average expectation, and said 2018 would be lower than the mid-point of average expected earnings for the year.”

Adam Jonas, Morgan Stanley analyst, said Ford’s efforts to revamp their brand will likely take years in order to see any positive growth. He thinks Ford will see negative profit numbers of about 20% per year until that predicted upswing.

Ford forecasts future losses as well. They anticipate that the higher costs of metals like steel and aluminum, combined with fluctuating and volatile currency “could cost the company $1.6 billion US in 2018.”

Ford only expects their cost-cutting strategy to bring redemption in 2020 or later. An array of risks must be dealt with first, and analysts call Ford’s approach vague and unstructured compared to rivals like General Motors who have presented more robust and solid messages concerning future growth.

Ford plans “to cut the number of passenger-car models and develop more trucks and sport utility vehicles focused on profitable niches like rugged off-road models.”

This announcement comes on the heels of Ford’s struggle with Takata air inflators built on a number of 2004-2006 Ranger pickup trucks. It is news that has muddied Ford’s reputation as of late, contributed to the biggest recall in automotive history, and has linked the motor company to at least two deaths.

In terms of stock value, Ford shares closed “down 92 cents US at $12.18 US on Wednesday on the New York Stock Exchange.” Their rival, GM, saw more than a fivefold increase in growth over Ford in the past 12 months.

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