Ford’s Net Profit Plummets 86%

Ford Motor Co.’s net earnings in the second quarter plunged to $148 million from $1.1 billion in the same period in 2018.

Ford’s pretax income slid 85% to $205 million for the period, mainly because of $1.2 billion in charges related to the company’s global restructuring. Adjusted pretax margin shrank to 0.4% from 4.3% a year ago.

April-June revenue was flat at $38.9 billion. Wholesales for the period dropped 9% worldwide to 1.36 million vehicles. A 3% gain in volume in Europe was offset by declines of 7% in North America and 22% in China. But adjusted free cash flow for the quarter climbed by $1.5 billion to $6.5 billion.

In North America, Ford’s wholesales declined 7% to 693,000 vehicles, largely because of a disruption caused by preparations to launch the next-generation Explorer SUV and its Police Interceptor variant for the 2020 model year. Operating earnings for the region slipped 3% to $1.7 billion.

In Europe, first-quarter pretax earnings swung to $53 million from a negative $73 million last year. It was the region’s first quarterly EBIT gain in two years.

In China, revenue for the period jumped 48% to about $900 million. Ford’s negative EBIT narrowed to $155 million from $483 million, as retail sales in China rose 13% compared with the first quarter of 2019.

For the full year, Ford predicts its adjusted EBIT will grow as much as 7% to at least equal last year’s $7.0 billion. Earnings per share are expected to be between $1.20 and $1.35, compared with $1.30 in 2018.