US automaker Ford shocked investors on Wednesday by saying it expects lower profits next year.
The second-largest US automaker will earn $7 billion to $8 billion next year following estimated pretax earnings of $8.5 billion in 2013, the company said in a statement.
The Dearborn, Michigan-based company pointed to plans to introduce 16 new models in North America — triple the number of vehicles launched in the region in 2013. Globally the number of new vehicles Ford plans to bring out next year is 23.
Costs associated with the new product launches will increase next year, the company said. Those costs are expected to have an impact on profit.
The announcement immediately effected Ford’s share price. After an increase of 29 per cent this year through Tuesday, the share price dropped 8 per cent midday on Wednesday.
In the difficult European market, Ford expects to incur restructuring costs of about $400 million related primarily to the closure of a Ford factory in Genk, Belgium, at the end of 2014.
Ford also plans to close two plants in Britain next year.
“For 2014, the company expects results in Europe to improve compared to 2013 as it continues the successful implementation of its transformation plan to achieve profitability in the region in 2015,” the statement said.
Ford came through the 2009 financial crisis without a Government bailout. Until recently a boom in sales in the US boosted the company’s earnings. The management team led by chief executive Alan Mulally expects 2013 to be among the best years in Ford’s history.