Question

what did investors think of Fords Motor Co future based on its performance in 2018

Answer 1

This answer is based on Ford Motor Company Q4 2018 earnings transcript (analyst call) and share price reactions

Ford Motor Co. made $3.7 billion in 2018, a 52 percent slip in profit compared to the year prior, due largely to poor performance from the company's Chinese and European businesses. The automaker reported it made 92 cents per share on $160.3 billion in revenue for the year. Ford lost $116 million in the fourth quarter of 2018 — the first quarterly loss since the fourth quarter of 2016. The fourth-quarter loss was driven largely by a remeasurement on pension plans, Shanks said Wednesday. The financial markets took a sharp decline at the end of the year, and that negatively affected global pensions.

Ford expects financial results in 2019 should be an improvement over the year prior. The automaker is in the middle of a sweeping global restructuring as it readies for a new chapter in the automotive industry. Under Hackett, Ford's senior leadership is pushing to trim $25.5 billion in operating costs over the next five years and spend $11 billion to shake up failing businesses in Europe, China and South America, and better position the automaker's North American business for continued profitability through the next decade.

Ford stock has fallen from around $13 at the beginning of 2018 to around $8.50 now.

Analysts said an aging U.S. vehicle lineup in addition to struggling business abroad hurt the automaker in 2018.

Ford posted a loss of $116 million for the fourth quarter, more than explained by an accounting charge related to its pensions. But the company said that its fourth-quarter operating income, excluding the pension charge and other one-time items, dropped 28% from a year ago to $1.5 billion on sharp declines in China and Europe. Ford's full-year operating profit, excluding one-time items, also fell 28% to $7 billion.

On a per-share basis, excluding one-time items, Ford earned $0.30 in the fourth quarter and $1.30 for the full year. Both were down from Ford's results a year ago, in line with the preliminary numbers Ford released last week.  

On balance, Ford sold a richer mix of vehicles at better prices than it did in the fourth quarter of 2017. But higher costs for key commodities, the costs of the ongoing Takata airbag recall, and losses at Ford's Chinese joint ventures (which saw a steep decline in sales) more than offset the good news.

Ford also had to take a whopper of a one-time charge, $877 million, after December's stock market decline left it with hefty on-paper losses in its pension portfolios as of year-end. That charge was the reason for Ford's fourth-quarter net loss.