Ford misses Q4 expectations on rising commodity costs

Stalled.

Ford’s Q4 profit missed Wall Street expectations as commodity costs continued to increase and its international operations weighed on results. Losses in Europe nearly quadrupled to $190 million and flooding in Thailand pushed its Asian operations to a loss. Additionally, increasing competition in South America pressured the bottom line. Overall, earnings fell to $0.20 per share from $0.30 in Q4/10 while analysts were looking for $0.25.

CFO Lewis Booth said, “We saw the external environment deteriorate and that really affected most regions other than North America. And then we saw slightly greater than we expected impact of commodities, currency and also the Thai floods. For the balance of the year, Booth said he expects Ford to be “modestly profitable” in Asia in 2012, but did not provide a forecast for Europe where he said other manufacturers are increasing incentive spending to drive sales.

He went on to say, “Europe is a web of countries, and we are seeing different developments with some countries back in recession and some hovering around recession. There is a lot of overcapacity in the industry and that is causing an increase in the level of incentives.”

Ford Motor (F : NYSE : US$12.23), Net Change: -0.57, % Change: -4.42%, Volume: 136,980,066

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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