DEARBORN, Mich. — Plummeting sales in Europe — and no hope for a quick fix in the troubled region — hurt Ford’s second-quarter profit and forced the company to lower its full-year earnings forecast.
Ford joined a string of other multinational companies — including UPS and Xerox Corp. — in cutting its profit forecast for the full year because of weakness in the region. The company expects to lose more than $1 billion in Europe in 2012, double its estimate from the beginning of the year.
The results underscore the importance of Europe to Ford, where it faces an economy in crisis. Ford relies on the region for about 25 percent of its sales and revenues. Sales in the region have fallen to 20-year lows as buyers shy away from big purchases.
“This is a very serious situation,” said Ford Chief Financial Officer Bob Shanks. “It’s going to take quite a long time for Europe to work through these issues.”
The automaker still expects a “strong” overall operating profit in 2012, but it will be lower than the $8.7 billion in 2011. Previously Ford had expected to make about the same amount as 2011.
Ford earned $1 billion, or 26 cents per share, in the quarter, down 57 percent from $2.4 billion, or 59 cents, a year earlier. Without one-time items, including the sale of two parts factories, it earned 30 cents. That beat Wall Street’s forecast of 28 cents.
Quarterly revenue fell 6 percent to $33.3 billion.
Ford posted a $2 billion profit in North America in the second quarter thanks to higher pricing and highly anticipated new vehicles like the Ford Escape. That was up 5.3 percent from a year earlier.
But losses elsewhere swamped North American gains. Ford lost $404 million in Europe, down from a profit of $176 million last year.
— This article appeared on page B1 of the Albuquerque Journal