DEARBORN, Mich. – Ford Motor Co.’s net profit fell 37 percent in the third quarter as sales slowed in the U.S. and China.
The company says it made $991 million from July through September, or 25 cents per share. Revenue was up 3 percent to $37.67 billion
Excluding one-time items, Ford says it made 29 cents per share, beating Wall Street expectations. Analysts polled by FactSet expected 28 cents per share. Revenue fell slightly short of estimates.
Investors have been calling on Ford to detail a promised $11 billion worth of cuts that were promised during the next five years as the company tries to right-size itself to better compete globally.
Chief Financial Officer Bob Shanks says the company won’t be releasing any further restructuring details on Wednesday, but would make them public when ready.
He reaffirmed the company’s full-year guidance of making an adjusted $1.30 to $1.50 per share. He said tariffs cost the company about $1 billion during the quarter, attributing $600 million of that to commodity cost increases due to U.S. tariffs on imported steel and aluminum. Another $200 million came from retaliatory tariffs imposed by China on U.S. vehicles, with the balance from the cost of canceling plans to build a small vehicle in China, the Focus Active, to be exported to the U.S.
North America remained Ford’s big profit center, where it made $2 billion before taxes, an increase of about $100 million. Shanks said that was due to selling more higher-profit SUVs and trucks and fewer low-margin cars as the market continued to shift away from sedans. So far this year, Ford’s U.S. sales are down 2.4 percent.
Analysts have complained that Ford hasn’t given many details of the restructuring plan, and the stock price has fallen because of that. Shares have lost about one-third of their value this year, closing down 4.8 percent Wednesday at $8.18.
Ford says it has released some parts of the grand plan to restructure. On Wednesday, it announced big changes in Asian operations by making its China business a stand-alone unit and recruiting the head of local automaker Chery Automobile to be its new China CEO.
For months, dealers have been complaining about an aging vehicle lineup, with some vehicles essentially staying the same since the 2011 model year.
But at a meeting with U.S. dealers on Oct. 17 in Las Vegas, company executives showed off new vehicles designed to update Ford’s offerings in the coming years.
Included were the Ranger small pickup, which Ford started to produce this week, as well as new versions of the Escape small SUV and Explorer large SUV that will reach showrooms next year. Also coming in 2019 is a new Mustang GT500, as well as the Super Duty version of the F-Series pickup, and a new Transit van.
In an interview Wednesday, North America President Kumar Galhotra conceded that Ford had let its products get too old, but pledged not to let it happen again.
“Right now our product portfolio isn’t as fresh as it should be, but by 2020 it’s going to be the freshest in the industry,” Galhotra said.
Ford announced previously that it would get out of the declining market for sedans in the U.S. to focus on SUVs, many with hybrid or electric drive systems. The iconic Mustang sports car eventually will be Ford’s only U.S. car.
The company also has announced a new U.S. marketing campaign.
Morgan Stanley analyst Adam Jonas last week downgraded Ford shares from “overweight,” which means “buy,” to “equal weight,” which means “hold.” He also cut his one-year stock price target from $14 to $10.
Jonas wrote in a note to investors that the restructuring plan, while significant, “lacks visibility.” He’s concerned that “the capital markets do not have confidence in Ford to take decisive action fast enough.”