Ford earnings to offer glimpse at cost cuts
Ford’s turnaround strategy will be in focus when the automaker reports first-quarter earnings Wednesday, as investors look for cost-cutting measures to lift profits while U.S. sales cool off.
The Dearborn, Michigan-based company has undertaken an effort to improve its “fitness” under new CEO Jim Hackett, the former head of office-furniture maker Steelcase. Hackett has pledged to make Ford more efficient and shift resources to producing new trucks and SUVs, which generate stronger profits. Light trucks have far outpaced sales of passenger cars amid a consumer shift to crossovers.
Wall Street expects Ford to report stronger first-quarter earnings compared to last year, despite a decline in revenue. Analysts project an adjusted profit of 41 cents a share, up from 39 cents in the same period in 2017. Revenue is projected to come in at $37.2 billion, down from $39.1 billion.
Ford’s sales in the U.S. declined 2.7% in the first quarter, while the industry combined for 1.9% growth on SUV demand. While Ford benefited from an increase in truck shipments, its SUV sales were down during the first three months of the year.
Jessica Caldwell, executive director of industry analysis, said Ford’s sales slump “isn’t necessarily a bad sign for the company.”
“These numbers are par for the course in a market where consumers are flocking toward trucks and SUVs,” Caldwell wrote. “What we really should turn our eyes toward is the F-150, which continues on a fiery sales streak that bolsters the company's bottom line.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 12.14 | +0.08 | +0.66% |
| GM | GENERAL MOTORS CO. | 42.38 | -0.07 | -0.16% |
| FCAU | n.a. | n.a. | n.a. | n.a. |
As part of its long-term strategy, Ford aims to accelerate the development of electric cars and new ventures such as self-driving vehicles. Investors will be closely following Hackett’s comments on future businesses and Ford’s progress toward becoming leaner.
Shares of Ford have retreated about 4.1% over the past 12 months. During the same period, General Motors has gained 11.8%.