DETROIT (AP) – Ford Motor Co’s profit last year plunged by more than USD3.6 billion, weighed down by slowing United Sales (US) sales, the cost of a botched SUV launch and some big pension expenses.
The Dearborn, Michigan, automaker said on Tuesday it made USD47 million in 2019, down from a USD3.68 billion profit a year earlier. For the fourth quarter the company lost USD1.7 billion, or 42 cents per share, hit by USD2.2 billion in one-time pension costs.
Excluding one-time items, Ford made 12 cents per share for the quarter, falling short of Wall Street’s expectations. Analysts polled by FactSet predicted 17 cents per share.
Quarterly revenue fell five per cent to USD39.7 billion, about even with Wall Street estimates. Shares of Ford, which released results after the markets closed on Tuesday, tumbled nine per cent to USD8.35 in
Ford had said earlier that it expected to deliver better results in 2019 than in 2018.
CEO Jim Hackett said on a conference call with analysts that the company fell short of expectations for the year, and he blamed the drop primarily on the flubbed launch of the new Ford Explorer SUV at its factory in Chicago.
New Explorers came off the assembly line with multiple problems and had to be shipped to a Detroit-area factory for repairs, delaying deliveries to customers. Hackett also referred to higher warranty costs during the year, especially for a flawed six-speed automatic transmission in the Ford Focus compact car.
He said the Explorer production is now fixed and the SUVs are selling well.
“Our leadership team is determined to return to world class levels of operational execution,” he said. “I have zero question that we have identified what was at risk there, what bad decisions we made, things we have to change.”