Ford Motor Co. on Wednesday reported fourth-quarter operating profit that fell short of earlier forecasts, results that signal continued financial pressure as first-year Chief Executive Jim Hackett tries to transform the company.
Ford reported after the market close net income of $2.4 billion for the October-to-December period, compared with a loss of $800 million a year earlier, which included a hefty special charge related to the company's pension plans.
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The nation's No. 2 auto maker by sales said operating income fell 19% to $1.7 billion, hurt by the higher cost of steel, aluminum and other commodities, as well as unfavorable foreign-exchange rates. Earnings per share were 39 cents, lower than the 42-cent average forecast of Wall Street analysts. The results were identical to preliminary numbers Ford provided to analysts last week.
For the full year, Ford's operating income fell 18% to about $8.4 billion. The company expects the bottom line to shrink this year on an earnings-per-share basis, warning last week that a continued rise in raw-materials costs and troublesome exchange rates would hurt results by $1.6 billion compared with 2017. Ford expects operating income to fall to $1.45 to $1.70 a share.
Fourth-quarter revenue rose 7% to $41.3 billion, surpassing Wall Street expectations of about $37 billion.
The downbeat 2018 outlook relative to rivals spotlights the tough road ahead for Mr. Hackett, 62, promoted in May to set a clearer vision for Ford's future while also putting Ford on a "fitness" regimen to improve its cost structure and returns on capital.
Ford Chief Financial Officer Bob Shanks said Ford needs to do a better job managing the business to weather swings in raw-material costs and exchange rates.
"We should still be performing at a higher level," Mr. Shanks told reporters Wednesday. The hit from commodities and foreign exchange "underscores to us the lack of fitness of the company relative to where it should be."
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
January 24, 2018 16:41 ET (21:41 GMT)