Ford Motor Co.
) projected higher profit in fiscal 2013 based on continuous
investment for growth in the One Ford plan. The company expects
full-year pre-tax profit, excluding special items, to increase to
$8.5 billion, from $8 billon recorded in 2012.
Ford predicts 2013 automotive revenues to increase by 10%. The
company also expects gain in market share in all regions except
Europe. Meanwhile, the automaker is focusing on the
transformation plan in Europe and restructuring in Australia for
better results in future.
Ford projected 2013 pre-tax profit from North America to be
higher than 2012. However, the company reduced the operating
margin guidance to 9.5% to 10% from the previous guidance of 10%
due to higher warranty expense of $250 million to $300 million
resulting from the recent recall of the Escape 1.6 liter.
South America is expected to record breakeven results in 2013 as
a result of challenges from the Venezuela government's actions.
The guidance for other Automotive business units, Automotive net
interest expense and Ford Credit remain unchanged. Meanwhile,
operating effective tax rate is projected to be 27%.
Fiscal year 2014 is expected to be crucial for Ford as massive
expansion plans have been announced. The company will hire 11,000
workers in the U.S. and Asia to support the launch of 23 models
during the year.
Ford will also open 3 new manufacturing facilities, 2 in Asia
Pacific and 1 in South America. Moreover, the automaker intends
to continue strengthening its One Ford Plan on the back of its
global brands and business growth through impressive products and
higher sales and profitability. Consequently, Ford expects
pre-tax profit, excluding special items, to be $7 billion to $8
billion in 2014.
Further, the automaker plans to introduce 16 vehicles in North
America, thus augmenting product launched 3-folds compared to
2013. However, Ford estimates 2014 wholesale volume in North
America to be lower than 2013 and net pricing to be unfavorable.
Accordingly, the automaker expects 2014 pre-tax profit to be
lower than 2013 and operating margin to range from 8% to 9%.
Ford's South American business is likely to benefit from higher
profitability in Brazil and Argentina. However, deterioration in
the external environment in Venezuela will negatively impact the
results of the company. Thus, Ford expects to report breakeven
results from South America in 2014.
In Europe, Ford is undertaking massive restructuring activities.
As a result, the company will be incurring restructuring costs
and launch costs. Overall, in 2014 Ford expects better results
than 2013 and anticipates attainment of profitability in 2015.
In Asia Pacific, Ford guides pre-tax profit to be in line with
the 2013 level, as positive transformation in the region is
offset by costs associated with growth, weak results in
Australia, production constraints and competitive pricing
Moreover, the automaker expects that Ford Credit's profits in
2014 will be in line with the 2013 level.
Ford is concerned about uncertainty in Europe and unfavorable
conditions in South America. This will pose challenges for the
automobile giant in achieving the 8% to 9% operating margin
outlook by mid-decade.
Ford is one of the largest automobile producers in the world
General Motors Co.
Honda Motor Co., Ltd.
Toyota Motor Corp.
). Currently, Ford has a Zacks Rank #2 (Buy).
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