Ford Motor's 2017 profit misses Wall Street estimates

Ford Motor Co on Tuesday forecast financial results for 2017 and 2018 that fell short of investor expectations, in a downbeat forecast that contrasted with a more positive outlook from rival General Motors Co .

Ford shares dropped more than 2 percent in extended trading after it released its forecast, but then recovered most of the losses. Ford said it would pay shareholders a $500 million, or 13 cents a share, extra dividend for the first quarter. It said that including that extra payout, it expects to distribute about $3.1 billion in dividends for all of 2018.

The differing outlooks for 2018 from GM and Ford highlighted how the two largest U.S. automakers have been on diverging roads for the past year.

GM Chief Executive Mary Barra has led a dramatic overhaul of the No. 1 U.S. automaker, selling its unprofitable European operations, exiting troubled Asian markets, and giving the green light to investments in self-driving vehicles and an expanded portfolio of electric vehicles.

GM projected 2018 results in line with the $6.00 to $6.50 a share adjusted earnings projected for 2017, and promised higher profit in 2019. GM shares closed up slightly, after a gain of about 2 percent earlier in the day. Wall Street has bid up GM shares by 18 percent from a year ago.

Ford shares are up only about 4 percent from a year ago. In May, Ford`s board ousted then-Chief Executive Mark Fields, and installed former Steelcase Inc CEO Jim Hackett as chief executive. Hackett has promised to slash the company`s product development costs by $14 billion, and has launched reviews of the automaker`s vehicle lineup.

Ford`s forecast reinforces a caution Hackett gave investors last fall, when he said the cost-cutting and product strategy changes could take time.

For full-year 2017, Ford said adjusted earnings would be $1.78 per share, below analysts` estimate of $1.83, according to Thomson Reuters I/B/E/S.

For 2018, Ford expects adjusted earnings of $1.45 to $1.70 per share. Analysts on average expected earnings of $1.62.

In a nod to the importance investors are placing on investments in alternatives to traditional auto manufacturing and sales, Ford said it would start reporting separately the results of its investments in "mobility" businesses, such as self-driving delivery vehicles and ride services, and previewed a loss for those operations of $300 million for 2017.

Ford blamed exchange rates and rising prices for the commodities used in its vehicles for the projected decline in 2018 adjusted earnings, in a statement and materials released ahead of a presentation to analysts by Chief Financial Officer Bob Shanks and Jim Farley, president of global markets.

Ford`s highly profitable F-series large pickup franchise will face aggressive challenges from GM and Fiat Chrysler Automobiles NV as those rivals crank up their own respective production of new generations of large pickups. GM`s new Chevrolet Silverado and Fiat Chrysler`s 2019 Ram are both designed to chop at the F-series` lead as the best-selling vehicle line in the United States.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)