Ford’s Profit Outlook Falls Short as EV Demand Slows
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Ford Motor Co. said full-year earnings would be at the low end of its forecast as the automaker struggles to cut costs and overhaul its electric vehicle strategy in the face of slowing EV demand.
Adjusted earnings before interest and taxes this year will be about $10 billion, down from a previous outlook for as much as $12 billion, the company said Oct. 28. Analysts had expected $10.6 billion.
Excluding some items, profit in the third quarter was 49 cents a share, matching the average of analyst estimates compiled by Bloomberg.
Ford’s shares fell 4.6% as of 4:29 p.m. after regular trading in New York Oct. 28, on pace to extend this year’s 7% slump.
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The lower full-year target comes as Ford reported a $1.2B loss in its electric vehicle business in the third quarter, citing pricing pressure. CEO Jim Farley has said the EV unit is “the main drag on the whole company.” Ford’s cross-town rival General Motors Co. last week raised its 2024 profit projection for the third time this year.
In July, Ford’s shares tumbled after the automaker reported a surge in warranty costs that caused it to miss profit estimates. Ford said it reduced warranty expenses in the third quarter while benefiting from higher vehicle pricing.
Farley has taken drastic action to address the repair issues, even forgoing near-term profit by holding thousands of new models in parking lots around Detroit for extra quality checks.
Ford also is scaling back its EV investments as mainstream buyers resist pricey battery-powered models and worry about limited charging infrastructure. In August, Farley canceled an electric three-row sport utility vehicle the company had planned.
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