Via Financial Times

Ford’s net income fell $3.6bn in 2019, as sales in China remained down compared to a year earlier and coronavirus raises questions about the company’s operations and sales there.

The Detroit automaker reported a $1.7bn loss on $39.7bn in revenue during the fourth quarter, which was down 5 per cent from the same period in 2018. Revenue for the year declined 3 per cent to $155.9bn.

The company missed consensus estimates for earnings per share as well. Analysts expected earnings per share of 17 cents for the fourth quarter and $1.23 for the year, according to FactSet data. Ford reported a loss per share of 42 cents in the fourth quarter. For the full year, it reported earnings per share of one penny, a decrease of 99 per cent from a year earlier.

The company reported a 38 per cent decrease in sales in the fourth quarter in China, its most important market after North America. It brought in $1bn in revenue.

China is the epicentre for the coronavirus epidemic, but Ford said in a statement that “it is too early to estimate implications of the coronavirus outbreak on its business”.

Excluding how the disease might affect its business, Ford forecast $5.6bn to $6.6bn in adjusted earnings before interest and taxes for 2020, and an adjusted profit of 94 cents to $1.20 a share. Analysts were looking for $1.26 a share.

Ford missed its full-year guidance of $6.5bn to $7bn in earnings before interest and taxes, reporting $6.4bn for 2019. The company had lowered its outlook for the year after weak third-quarter profits, citing higher warranty costs, higher than planned incentives in North America and lower sales volume in China.

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Shares in Ford dropped more than 9 per cent in after-hours trading.

Ford is a year and a half into a global restructuring project slated to cost $11bn in lowered profits. Company executives say the restructuring will improve profits and boost the Detroit automaker’s development of electric and self-driving cars. In North America, the automaker’s biggest market, it is dropping car models except for the Mustang, and in Europe it is cutting 12,000 jobs and selling or closing six plants by the end of 2020.

The company said in the third quarter that, by the end of 2019, the restructuring would have taken charges up to $3.5bn, with $9.5bn in costs still to come.