Ford Execs Are Worried…

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Ford stockholders should be, too: 

DETROIT — Ford Motor Co. executives will aim to reassure analysts and skeptical investors next week about its prospects amid declining profits, stagnating U.S. sales and threats emerging from Silicon Valley.

The automaker’s Investor Day conference on Wednesday, Sept. 14, comes on the heels of Ford cutting its profit outlook for 2016 by $600 million, the approximate cost of recalling 2.3 million vehicles for faulty door latches. Ford this week said it now expects an adjusted pretax profit of $10.2 billion this year, 5.6 percent lower than the $10.8 billion it earned in 2015.

While investors focus on Ford’s more immediate performance, executives would rather shift the spotlight to its work on mobility technology and autonomous cars.

CEO Mark Fields will undoubtedly talk up his plan,revealed Aug. 16, to roll out driverless cars by 2021, news that did nothing to bolster Ford’s languishing stock price. On Friday, Fields was in San Francisco to announce that Ford is buying a crowd-sourced shuttle company called Chariot and launching a bike-sharing program there.canary-pic

Ford barreled into 2016 with significant momentum, buoyed by a string of record North American profits and its first profitable year in Europe since 2011. Fields touted 2015 as a “breakthrough” year for the automaker. But in July, Ford warned that its financial targets were at risk from rising incentives, the United Kingdom’s June vote to leave the European Union and slowing U.S. sales growth.

“We’re seeing more pressure throughout the business for the remainder of this year,” Fields said July 28, “so as a result, we’re calling for the second half of this year, and particularly the third quarter, to be much weaker than normal.”

Executives at rival automakers have privately expressed surprise and confusion about Ford’s abrupt shift in tone. Its bleak warning contrasted with sunny prognostications from several large suppliers and came a week after GM posted record second-quarter net income, doubling its profit from the year-ago period and increasing its full-year projections.

Ford’s revised outlook, revealed in a regulatory filing last week, calls for adjusted pretax profits of about $1 billion in the third quarter, 60 percent lower than the record result posted a year ago, and $2.35 billion in the fourth, a 10 percent decline.

Ford last held a formal Investor Day in September 2014. That meeting also coincided with a large, costly recall, as the company announced a $500 million charge to replace defective airbags. That revelation and pessimistic forecasts for South America and Europe pushed Ford’s stock down 7.5 percent the day of the event, to $15.11.

Ford shares fell 2.75 percent on Friday to close at $12.38.

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