Ford Motor Co. said Tuesday it expects lower operating profit on an earnings-per-share basis in 2018, with higher commodity costs and adverse exchange rates offsetting gains from cost-cutting efforts and continued demand for high-margin pickup trucks.
The auto maker doesn't plan to take financial charges related to U.S. tax reform. General Motors Co. earlier on Tuesday said it would book a $7 billion write-down due to reflect the loss in value of tax-deferred assets held on its balance sheet.
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The Dearborn, Mich., auto maker said 2017 net income equaled $1.95 per share, and operating income equaled $1.78 per share, an improvement compared with the prior year. It expects 2018 operating income to fall to a range of between $1.45 per share and $1.70 per share.
The company also sees Ford Credit lending arm earnings decreasing this year due to higher interest rates. Prices of metals, such as steel and aluminum, are hitting the company particularly hard.
The results and outlook cap Chief Executive Jim Hackett's initial months at Ford's helm. Mr. Hackett, hired to replace longtime Ford executive Mark Fields, has been charged with cutting costs, sharpening the auto maker's approach to future technology and revitalizing the corporate culture.
At this week's Detroit auto show, Ford rolled out new components of Mr. Hackett's plan. Executives committed to boost spending on electrified vehicles to $11 billion in capital spending, engineering and other costs in the years spanning 2015 to 2022. The company will unveil its first long-range electric SUV by 2020, several years after Tesla Inc. and General Motors Co. started selling electric cars capable of driving several hundred miles on a charge.
The company is shifting $500 million in annual spending from conventional gasoline or diesel cars to electrified vehicles.
Ford is also planning to shift $7 billion of investment into trucks and SUVs, two segments that are fast growing and deliver disproportionate profits to auto makers.
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(END) Dow Jones Newswires
January 16, 2018 17:31 ET (22:31 GMT)