Ford Disappoints with Lower Profit and Dismal Outlook

October 27 00:00 2011

New York, October 27 ( – After posting a lower profit for Q3 2011 due to losses in European and Asian operations and falling metals prices, Ford Motor Co (NYSE: F) cut its 2011 profit margin forecast that points to a weaker-than-expected fourth quarter. Citing reasons like the slowing growth in China and pricing pressure in Europe, Ford failed to provide any timetable for its resumption of paying a dividend which is long awaited.

Ford shares fell as much as 7.2 percent on Wednesday before recovering some losses. Since Ford has posted profits for 10 straight quarters, analysts and investors were waiting for the earnings report and an indication as to when the company would be paying its first dividend since 2006.

Raw material costs fell sharply in September raising hopes that this would help profits. However, Jefferies analyst Peter Nesvold said, “Investors are showing some frustration that even as raw material costs are coming down it’s not benefiting EPS.”

Revenue rose 14 percent to $33.1 billion but net income slipped to $1.65 billion, or 41 cents per share, down from $1.69 billion or 43 cents per share a year earlier. Excluding one-time items, the company earned 46 cents per share, 2 cents higher than what analysts had forecast. Ford also cut its 2011 outlook for its automotive profit margin, saying it now expects 5.7 percent, down from 6.5 percent through the first three quarters.