Ford Falls On Q4 Earnings Miss, Lower Outlook; Notes Execution Problems Around Explorer

Ford Motor Company F plunged in after-hours trading, dropping below a 52-week low after the company missed fourth-quarter earnings expectations while losing $1.7 billion during the quarter.

The U.S. automaker reported quarterly earnings of 12 cents per share, while Wall Street had been expecting 15 cents. Ford did beat analysts' expectations on quarterly net sales, coming in at $36.67 billion, ahead of the Street's $36.49 billion.

Ford also lowered its outlook for the coming quarter below consensus forecasts, cutting 3 cents off the top range of its EPS forecast to $1.20 to $1.32 per share.

Execution Problems Around Explorer

Ford admitted it had execution issues around its new Explorer SUV, which came as global economic conditions also made it a tough year for Ford and other automakers. Ford saw sales fall 5% from the previous year, though it found good news in a bottom line improvement in China.

"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," Ford CEO Jim Hackett said in a press release. "We recognize, take accountability for and have made changes because of this.”

U.S. car sales overall fell in 2019. Ford noted, however, that full year results in China and Europe were sharply improved.

Ford’s fourth-quarter operating loss in China was 61% smaller than in the same last year, thanks to lower costs. Ford said it was the fourth straight quarter of year-over-year improvement in China.

Other Highlights

• Fourth-quarter adjusted free cash flow was $498 million, down 67%.
• For full-year 2020, Ford expects adjusted free cash flow of $2.4 billion to $3.4 billion, and adjusted EBIT of $5.6 billion to $6.6 billion.
• For full-year 2019, Ford’s adjusted free cash flow was $2.8 billion, flat compared to 2018.

Ford's stock dropped more than 9% after-hours to $8.31 per share at time of publication.

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