“Special Items” Are The Reason Ford Loses

Several automakers are currently reporting declining profits despite rising sales. Ford is no different, with its results for the past quarter even ending in a loss.

Ford divides its products into three categories in its books. The “Model e segment” is the collective name for electric cars, “Ford Blue” is the collective name for (semi-)traditionally powered passenger cars, and “Ford Pro” is the group responsible for commercial vehicles, including the wildly popular F-Series pickups and the quite popular Transit models in Europe.

Ford Blue accounts for the vast majority of cars sold but saw a slight sales decline of 6 percent in the past quarter. This was offset by sales increases in the other two divisions, albeit marginally. Overall, Ford sold 4 percent more vehicles than in the same quarter last year.

The most important figure, however, is profit, which is in quotation marks. Anyone who has ever studied such a financial report knows that it represents a loss. Ford recorded a loss of $36 million, approximately €31.5 million, but attributed this primarily to so-called “special items.” These are one-time events, such as investments in factories, restructuring, and other large, often unexpected expenses.

Ford, as both an American and European company, is also significantly affected by the trade tariffs on both sides. The loss is also negatively impacting the full-year forecast. Previously, Ford expected to make between 7 and 8.5 billion in profit (EBIT), but this has now been revised to 6.5 to 7.5 billion. In May, Ford had already distanced itself from its earlier forecast due to uncertainties surrounding the looming, but not yet final, import tariffs.

Also See: Ford Yet Again Recall Almost 700,000 Vehicles In The United States

Source: AutoJosh | Read More