Ford Motor (NYSE:F) stock fell another 1.26% on October 28. Shares have dropped 8.4% over the past three months. Last week Ford cut its forecasts, citing a slowdown in China, and announced additional job cuts in Oakville, Ontario.
The automobile giant is in the middle of an $11-billion global restructuring which aims to improve profitability going forward. It also has its eyes on accelerating its development of electric vehicles and self-driving cars. Ford’s most recent quarterly report has shown some of the growing pains associated with this transformation.
Management now estimates that adjusted earnings before interest and taxes will be between $6.5 billion and $7 billion. This is down from its previous forecast range between $7 billion and $7.5 billion. In any case, this puts it below the $7 billion adjusted earnings it posted in 2018.
North America was the lone region where Ford posted an operating profit in the third quarter. It reported a $179-million operating loss in Europe and a $281-million operating loss in China. CEO Jim Hackett said that its performance in China was not acceptable.
More worrying, Ford has said that economic headwinds have picked up since its last Q4 guidance. Last month, Moody’s dropped Ford’s debt rating to junk status, and its adjusted earnings per share are expected to fall below its initial guidance of $1.35.
This recent dip has failed to put the stock into technically oversold territory. It is hard to like its value in late 2019, so I’m staying away until there are signs of improvement.
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