Ford shares nosedived after it handed investors a weaker-than-expected 2020 forecast, warning that quality problems, lower profits at its credit arm and continued investments in unprofitable self-driving cars would weigh down profits.
Shares fell 9.7 per cent in after-hours trading.
“The results were not OK in 2019,” Ford’s chief financial officer Tim Stone told reporters at the company’s headquarters outside Detroit. “As I look to 2020 and beyond, I’m very optimistic.”
Ford said it expects 2020 operating earnings to be in the range of 94 cents to $1.20 a share. Analysts were expecting $1.26 a share.
The disappointing 2020 forecast, coming after Ford previously trimmed its 2019 outlook, is a blow for chief executive Jim Hackett.
Hackett, who took over in May 2017, has been asking investors to be patient with a restructuring that has seen the formation of a wide-ranging alliance on electric vehicles with Volkswagen AG and the sale of its money-losing operations in India to a venture controlled by India’s Mahindra & Mahindra.
By Ford’s own accounting, the restructuring is far from complete. It has booked $3.7bn of the projected $11bn in charges it previously said it would take, and expects to book another $900m to $1.4bn this year.
For the fourth quarter of 2019, Ford reported a net loss of $1.7bn, or 42 cents a share, compared with a loss of $100m, or 3 cents a share, a year earlier.
The quarter included a loss of $2.2bn due to higher contributions to its employee pension plans, something it disclosed last month.
Excluding one-time charges, Ford earned 12 cents a share, three cents below what analysts had expected.
Revenue in the quarter fell 5 per cent to $39.7bn, above the $36.5bn Wall Street had expected.
Ford’s adjusted free cash flow fell 67 per cent in the fourth quarter to $500m, including the $600m cost of bonuses related to a new labor deal with the United Auto Workers union.
The UAW deal also played a role in driving North American automotive profit margins down to 2.8 per cent in the fourth quarter.
Ford said its operating losses in China last year totaled $771m, including a loss of $207m in the fourth quarter. It lost $1.5bn in 2018. Ford’s market share in China in the fourth quarter fell to 2 per cent from 2.3 per cent last year.