Ford Sees Pretax Profit $6 Billion, Missing 2014 Profit Goals

Bloomberg News

said it will earn a pretax profit of $6 billion this year, missing its goal of $7 billion to $8 billion, as results in South America and Europe are looking worse than when the year began.

Shares in the second-largest U.S. automaker fell 7.5 percent to $15.11, wiping out the year's gains. Ford has fallen 2.1 percent so far this year, compared with a 7 percent gain by the S&P 500 Index.

Ford told investors today that it will lose $1 billion in South America this year, as inflation and other currency problems hurt operations there. The company forecast a smaller, but still-large loss in the region next year. Ford also forecast a loss of $1.2 billion in Europe this year and a loss of $250 million there in 2015 during an investor presentation. It had previously projected a profit in Europe next year.

'We know we have challenges in 2014,' Chief Executive Officer Mark Fields told the investors. 'We looked at the reality, we deal with it proactively and we move on.'

Fields, who replaced retired CEO Alan Mulally on July 1, today made his first presentation to Wall Street investors and analysts. He projected the Dearborn, Michigan-based automaker increasing vehicle sales by more than 3 million by 2020, lifting Ford into the top five for global auto sales.

'We are a growth company in a growth industry,' Fields said. Global auto industry revenue will grow to $3 trillion by 2020, from $2 trillion in 2000, Fields said. 'We want to get more than our fair share,' he said.

F-Series Trucks

The company separately said that the next version of its Super Duty F-Series pickups -- those bigger than the full-size F-150 -- will be made of aluminum. A new F-150 with an all-aluminum body is due to go on sale this year.

The redesigned F-150 is among a record 23 new-model introductions Ford is making worldwide this year, including 16 in North America. Ford's U.S. sales slipped 0.3 percent this year through August and the automaker has said 2014 profit will slip as it retools factories and spends to introduce new products. Ford had net income of $2.3 billion in the first half of the year, compared with $2.84 billion in 2013's first half.

As part of its global growth goals for 2020, Ford projected Lincoln sales tripling to 300,000.

'Ford is being realistic on Lincoln by recognizing the turnaround and global growth of the luxury brand is a very long term proposition, with big payoffs not likely until the next decade,' Michelle Krebs, a senior analyst at AutoTrader.com, said in an e-mailed statement.

To contact the reporter on this story: Keith Naughton in Dearborn, Michigan, at knaughton3@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net James Callan

Mark Fields, Ford's chief executive officer, will meet with investors Sept. 29 in Dearborn, Michigan, to update them on the company's progress in meeting goals to sell 8 million cars and trucks globally, up from 6.3 million last year, and boost global automotive operating margins to 8 percent or 9 percent, from 5.4 percent last year. Photographer: Bradley C. Bower/Bloomberg

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