Ford Stock Sets Up for a New 52-Week Low on $1.7 Billion Loss

By Paul Ausick Published Feb 4, 4:54PM EST

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Ford Stock Sets Up for a New 52-Week Low on $1.7 Billion Loss — © Cliffsman / Getty Images

Ford Motor Co. (NYSE: F) reported fourth-quarter and full-year2019 results after markets closed Tuesday afternoon. For the quarter, the automaker posted adjusted diluted earnings per share (EPS) of $0.12 on revenues of $39.7 billion. In the same period a year ago, the company reported EPS of $0.30 on revenues of $41.8 billion. Analysts were looking for EPS of $0.15 and revenues of $36.49 billion.

For the full year, Ford reported EPS of $1.19 on revenues of $155.9 billion compared with 2018 EPS of $0.92 and revenues of $160.3 billion. Analysts had been looking for EPS of $1.22 and revenues of $143.88 billion.

Net loss increased from $100 million in the fourth quarter of last year to $1.7 billion. GAAP net loss dropped from $0.03 a year ago to $0.42, and net income margin fell to negative 1.7%, a drop of 1.6 percentage points year over year.

Ford attributed the quarterly net loss to a previously announced pension loss of $2.2 billion among other remeasurement losses. Better earnings in China and Europe were more than offset by and adjusted EBIT loss in the United States. Automotive EBIT for the quarter was down 81% to $215 million. Higher pricing and better product mix, particularly in North America, were more than offset by lower launch-related volumes, higher costs for new products, unfavorable currency exchange, and UAW contract-related costs.

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CEO Jim Hackett said:

We made great strategic progress this past year with a fundamental redesign of Ford that is setting us up to compete and win in this emerging era of Smart Vehicles for a Smart World – with great products, services and long-term value. Financially, the company’s 2019 performance was short of our original expectations, mostly because our operational execution – which we usually do very well – wasn’t nearly good enough. We recognize, take accountability for and have made changes because of this.

Ford’s full-year 2020 outlook included adjusted free cash flow in the range of $2.4 to $3.4 billion and adjusted EBIT of $5.6 to $6.6 billion. Capital spending is forecast at $6.8 to $7.3 billion, down as much as $800 million compared with last year. The company also plans to continue paying a $0.15 per quarter dividend. The company noted that the outlook does not include any effect related to the coronavirus outbreak.

Analysts had forecast first-quarter EPS at $0.36 and revenues totaling $35.66 billion. For the full year, analysts were expecting EPS of $1.26 and revenues of $141.87 billion.

In after-hours trading Tuesday, shares are getting pummeled, down about 10% at $8.27 in a 52-week range of $8.15 to $10.56. The consensus 12-month price target on the stock was $10.09 before the earnings report was released. The dividend yield on the stock is 6.68%. Investors are betting that won’t last much longer.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.