Ford Motor suspended its annual forecasts due to the uncertainty about the tariffs of President Donald Trump, and said that the taxes would cost the company about 1.5 billion dollars in adjusted profits before interest and taxes.
In February, the Dearborn car manufacturer, Michigan, projected profits before interest and taxes from 7,000 million to 8.5 billion by 2025. That forecast did not take into account tariffs.
Ford financial director, Sherry House, said the company was on the way to comply with that orientation, excluding the consequences of tariffs. “We are focused on managing what we control,” he said.
While rivals as General Motors recently provided updated orientations, Ford executives said they suspended the company’s prospects until they have more clarity about the effect of retaliation tariffs, as well as the way in which consumers can react to price increases.
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The earnings per action of Ford fell to 14 cents in the first quarter, far exceeding the estimation of the LSEG analysts of 2 cents per action, but below the 49 cents a year earlier. Cost and quality improvements helped Ford overcome expectations, according to executives.
At the beginning of the year, the car manufacturer had warned that the results of the first quarter would be affected by production interruptions related to the launch of products on several floors. The net benefit fell sharply to 471 million dollars, compared to 1.3 billion the previous year.
Ford’s revenues fell 5% to 40.7 billion dollars in the quarter, but exceeded 36,000 million expectations. The benefits were driven by consumers’ hurry to get vehicles, concerned about the possibility that tariffs cause price increases.
Ford was one of the few automobile manufacturers that offered incentives to monopol market share during this purchasing frenzy.
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The manufacturer said the tariffs would add 2.5 billion dollars to total costs for the year, mainly related to the import expenses of vehicles in Mexico and China.
With Reuters information
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