$1.2 Billion Loss in Electric Vehicle Business Segment in Q3
American automaker Ford's stock price plunged about 6% in after-hours trading following large losses due to its struggling electric vehicle business.
According to Ford's earnings report released after the New York Stock Exchange closed on the 28th (local time), third-quarter revenue was $46.2 billion, and earnings per share (EPS) were 49 cents. These results exceeded analysts' expectations compiled by FactSet (revenue of $45.2 billion, EPS of 46 cents).
However, the company recorded a $1.2 billion loss in its electric vehicle business. Ford reported that the total loss in the EV segment from the first to third quarter reached $3.7 billion, and it expects losses to reach up to $5.5 billion by the end of this year. Ford is facing difficulties as it must engage in cutthroat competition with Tesla and Chinese companies amid a slowdown in domestic EV demand in the U.S. In August, Ford halted development of its three-row electric sport utility vehicle (SUV) and postponed the launch of its electric pickup truck from April next year to 2027.
Ford announced it is lowering its adjusted annual earnings before interest and taxes (EBIT) guidance from up to $12 billion to $10 billion. This figure is below the market expectation of $10.6 billion.
Meanwhile, Ford's competitors are posting strong results. General Motors (GM), which previously announced its third-quarter earnings, raised its full-year outlook. Tesla, which also reported results exceeding market expectations, stated that its growth rate next year will reach 20-30%.
Ford's stock price rose 2.71% during the day on the New York Stock Exchange but plunged 5.98% in after-hours trading following the earnings announcement. The stock has shown a weak trend, falling more than 20% since July due to soaring warranty costs and the postponement of SUV launches. Ford Chief Financial Officer John Lawler emphasized during the conference call, "We need to accelerate to get ahead of our competitors."
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