Why is Ford lowering its 2017 profit guidance?

Ford is lowering its 2017 total company adjusted pre-tax profit guidance to approximately $9 billion primarily due to planned investments in emerging opportunities. While this impacts the current year's profitability, the company expects this strategic spending to set the stage for improved profits in 2018.

What factors are contributing to the lower Q1 2017 earnings per share forecast?

The lower EPS outlook for the first quarter of 2017 compared to the prior year is due to a combination of factors: increased costs related to commodities, warranty expenses, and strategic investments; lower vehicle sales volume, particularly in the fleet segment; and unfavorable foreign currency exchange rates.

What is the outlook for Ford Credit?

Ford continues to expect Ford Credit's pre-tax profit to be approximately $1.5 billion in 2017. The company also anticipates an improvement in Ford Credit's profitability in 2018, indicating a stable or positive outlook for its financing arm.

Does Ford provide GAAP net income guidance?

No, Ford is not providing guidance for net income, the comparable GAAP financial measure. This is because full-year net income for 2017 and 2018 may include significant special items, such as pension and other postretirement benefit remeasurement gains and losses, which are difficult to predict with reasonable certainty.

FORD MOTOR CO 8-K: Regulation FD

Summary

Ford Motor Company filed an 8-K on March 23, 2017, to disclose updated financial guidance and discuss key items with the investment community. The company anticipates its total company adjusted pre-tax profit for 2017 to be approximately $9 billion, a decrease from 2016 levels. This reduction is attributed to planned investments in emerging opportunities. However, Ford expects this figure to improve in 2018. Furthermore, Ford provided its first-quarter 2017 earnings per share (EPS) guidance, projecting a range of $0.30 to $0.35 for both GAAP and adjusted EPS. This outlook is lower than Q1 2016 due to increased costs (including commodities, warranty, and strategic investments), reduced volume primarily in fleet sales, and unfavorable currency exchange rates. Ford Credit's pre-tax profit for 2017 is still expected to be around $1.5 billion, with an anticipated improvement in 2018.

Key Highlights

12017 total company adjusted pre-tax profit guidance lowered to approximately $9 billion, down from 2016.
2The decrease in 2017 profit guidance is driven by planned investments in emerging opportunities.
3Ford expects total company adjusted pre-tax profit to improve in 2018.
4First-quarter 2017 EPS guidance set between $0.30 and $0.35 (GAAP and adjusted).
5Q1 2017 EPS outlook impacted by higher costs (commodities, warranty, investments), lower fleet volume, and unfavorable exchange rates.
6Ford Credit's 2017 pre-tax profit is expected to remain around $1.5 billion and improve in 2018.

FORD MOTOR CO 8-K Report, Regulation FD Disclosure (Mar 23, 2017)

Summary

Key Highlights

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