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Ford profits hit by lower sales, higher costs

Ford warned its 2017 results wouldn't be pretty. And they weren't.The automaker closed the books on a difficul...

Posted: Jan 26, 2018 4:19 PM
Updated: Jan 26, 2018 4:19 PM

Ford warned its 2017 results wouldn't be pretty. And they weren't.

The automaker closed the books on a difficult year Wednesday, with lower operating profits, higher costs and thinner margins.

The number of cars it sold during the year also fell, but thanks to higher average car prices, sales actually edged higher. But profits were hurt by more expensive materials, like steel, as well as increased warranty costs from recalls and its investment in the launch of the Expedition and Navigator SUVs.

Ford, the second largest U.S. automaker behind General Motors, said earlier this month it expected to disappointing results for 2017. It also said its 2018 profits would also fall short , given rising commodity costs and he company's need to invest more in developing SUVs, electric and autonomous driving vehicles.

Related: It's a showdown for pickup trucks

"Clearly I and my team are not satisfied with this level of performance," said CEO Jim Hackett during his call with investors Wednesday. "We simply have not done enough to be fit today."

But Hackett also vowed that investors will soon see some of the advantages of changes the company is making, including its increased emphasis on autonomous driving vehicles. He promised some of the new technologies it is investing in will start to pay off as soon as next year. And he vowed the company would take steps to improve financial results this year.

He said he was very confident with the company's plans, "not happy at all that we're not proving to you what that's going to yield [but] really confident that you will be happy with us as we bring [those plans] forward."

Shares of Ford plunged last week as a result of the warning at that time. They dipped again in after-hours trading on the latest report.

The disappointing financial results and poor stock performance is one reason that Ford replaced CEO Mark Fields with Hackett, who had been overseing the autonomous driving car business.

Related: American sedans are vanishing

For the industry as a whole, U.S. new car sales posted a 1.8% decline last year, the first drop in sales since 2009. But that sales volume is still near record levels. And for the most part automakers are expected to report good results thanks to global sales growth and the fact that car buyers are paying record average prices.

Ford's tough year will mean that profit sharing checks for about 54,000 hourly U.S. factory workers at Ford will fall to an average of $7,500 compared to a $9,000 payment a year ago.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 312969

Reported Deaths: 3637
CountyCasesDeaths
Hennepin661641115
Ramsey27766505
Anoka22149228
Dakota22015190
Washington13999115
Stearns13733116
St. Louis8747112
Scott846255
Wright775843
Olmsted665634
Sherburne587641
Clay498457
Carver474213
Blue Earth414116
Rice412836
Kandiyohi408122
Crow Wing359634
Otter Tail314322
Chisago311611
Nobles308730
Benton299451
Winona276930
Mower261623
Douglas260337
Polk256324
Morrison231629
Lyon218711
Beltrami217117
McLeod212812
Becker205415
Goodhue203228
Steele19497
Isanti190617
Itasca190423
Carlton185816
Todd181214
Nicollet162525
Mille Lacs153631
Freeborn15336
Le Sueur147011
Cass143710
Brown141315
Waseca139211
Pine13658
Meeker12879
Roseau11964
Hubbard114925
Martin113320
Wabasha10561
Redwood94619
Chippewa8877
Cottonwood8664
Renville86527
Dodge8600
Watonwan8544
Wadena8016
Sibley7934
Rock7779
Aitkin76730
Pipestone72518
Fillmore6990
Houston6984
Yellow Medicine64812
Pennington6478
Kanabec61913
Murray5873
Swift5838
Faribault5612
Pope5391
Clearwater5248
Stevens5103
Marshall4979
Unassigned49359
Jackson4881
Lake4226
Koochiching3926
Wilkin3895
Lac qui Parle3773
Lincoln3591
Norman3497
Big Stone3182
Mahnomen2964
Grant2796
Kittson2248
Red Lake2133
Traverse1481
Lake of the Woods1001
Cook720

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 227398

Reported Deaths: 2368
CountyCasesDeaths
Polk33642336
Linn14352165
Scott1124986
Black Hawk10893135
Woodbury10372126
Johnson955336
Dubuque923291
Story678822
Dallas637257
Pottawattamie631970
Sioux370325
Webster358535
Cerro Gordo357144
Marshall348546
Clinton331344
Buena Vista305414
Des Moines291520
Muscatine289268
Warren281914
Plymouth276042
Wapello255772
Jones232313
Jasper217944
Marion205320
Lee203917
Carroll198422
Bremer195212
Henry18307
Crawford174616
Benton170619
Tama154340
Jackson144613
Delaware144221
Washington141314
Dickinson139210
Boone137011
Mahaska126827
Wright12456
Clay11784
Buchanan117010
Hardin115810
Page11374
Hamilton11199
Clayton11175
Cedar108413
Harrison107729
Kossuth10667
Calhoun10617
Floyd105016
Mills10487
Fayette103910
Lyon10338
Butler10216
Poweshiek99313
Winneshiek97613
Iowa95812
Winnebago93023
Hancock8677
Grundy86311
Louisa86216
Sac8608
Chickasaw8574
Cherokee8484
Allamakee81811
Cass81623
Mitchell7984
Appanoose79312
Humboldt7715
Union7706
Shelby76511
Emmet76424
Guthrie75415
Franklin73921
Jefferson7142
Madison6864
Unassigned6690
Palo Alto6554
Keokuk5997
Howard5599
Pocahontas5584
Greene5250
Osceola5241
Ida48913
Clarke4874
Davis4709
Taylor4653
Montgomery46311
Monroe44412
Adair4418
Monona4352
Worth3630
Fremont3583
Van Buren3585
Lucas3256
Decatur3170
Wayne3007
Audubon2962
Ringgold2112
Adams1702
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