DETROIT — Ford Motor Co. insists it's on track to deliver consistently strong profit margins at the end of the decade.
But in the meantime, the automaker will feel some financial pain. And it said losses from its work on autonomous vehicles and mobility services will increase before that part of the business generates profits.
Ford lowered its forecast for 2018, which CEO Jim Hackett bluntly characterized as a "bad year," though it's still expected to be a highly profitable one. Ford's per-share guidance for 2018 translates to earnings of $8 billion to $9.2 billion, according to investment firm Barclays Capital, down from an initial forecast of $9.9 billion.
Ford shares, which had started the week by hitting a 52-week high, fell nearly 7 percent in response to the news.
CFO Bob Shanks, speaking last week at the Deutsche Bank Global Auto Industry Conference here, said the company will face about $1.6 billion in increased commodities costs, including steel and aluminum. Adding to the financial woes are the mobility investments, which were about a $300 million drag on earnings in 2017, the first year in which they've been broken out separately. Executives said mobility losses would be larger in 2018.
"The presentation was a reminder that the transition at Ford in the Hackett era will take time and that we have a long journey ahead — just as the Mulally era a decade ago took several years to bear fruits," Barclays analyst Brian Johnson wrote in a Wednesday, Jan. 17, report. "It doesn't seem as if there are any low hanging fruits on cost to drive upside to earnings, and Ford appears to be in the very early stages in its strategy transition in EVs and autonomous."
Shanks said the company was "not satisfied with our performance" but assured investors that he's optimistic.
"I have a lot more confidence about our future today," he said. "I have the clarity around the direction we're heading as a business."