Overseas losses drag down Ford fourth-quarter results

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DETROIT (Reuters) – Ford Motor Co (F.N) on Wednesday posted a lower operating fourth-quarter profit as losses in every global region except North America weighed on results.

FILE PHOTO – The logo of the Ford Motor Company is seen outside a car dealership in Cape Town, South Africa, October 18, 2017. REUTERS/Mike Hutchings

“It was not a year we were happy with and the fourth quarter continued that theme,” Chief Financial Officer Bob Shanks told reporters at the headquarters of the No. 2 U.S. automaker, which is restructuring its operations globally.

Last week, Ford provided a cloudier 2019 outlook due to tariff costs and uncertainty over Britain’s exit from the European Union.

That was in contrast to Ford’s larger U.S. rival General Motors Co (GM.N), which on Jan. 11 forecast higher 2019 earnings that far surpassed analysts’ estimates.

Shanks reiterated on Wednesday that Ford’s large presence in the country gave it extensive exposure to the effects of Brexit.

Ford said on Jan. 10 that it would cut thousands of jobs and look at plant closures in Europe as part of its plan to return to 6-percent operating margin in the region.

Ford posted a fourth-quarter net loss of $116 million or 3 cents a share, down from a net profit of $2.5 billion or 63 cents a share in the same quarter in 2017, which it attributed largely to one-time pension costs and other charges.

Excluding one-time charges, the company reported a net profit of 30 cents per share, in line with an outlook Ford executives provided last week.

The company’s pre-tax margin fell to 3.5 percent from 4.9 percent a year earlier.

In North America, Ford posted a pre-tax profit of $2 billion. In every other region, the automaker posted a loss. The largest loss of $381 million was in Asia, driven by China where the company has seen sales plummet.

On Jan. 15, Ford and Germany’s Volkswagen AG (VOWG_p.DE) said they would join forces on commercial vans and pickups and were exploring joint development of electric and self-driving technology in a bid to save billions of dollars.

Ford previously said it remains committed to its money-losing operations in Europe and South America, and its losses in China would narrow this year.

When asked about its South American operations on Wednesday, CFO Shanks said Ford had no announcement to make yet. He acknowledged the potential for disruptions in 2019 including strikes in Europe as the company continues its restructuring.

Ford said under profit-sharing agreements it would pay its hourly U.S. workers $7,600 for 2018, up from $7,500 in 2017.

Reporting By Nick Carey; Editing by Nick Zieminski

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