This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Ford Shares Drop on Plans for 2014 Investment in 2015 Growth

DETROIT(TheStreet) -- Ford  (F) shares were falling Wednesday after the automaker said 2014 pretax profit will decline from their levels this year, one of the best in the company's recent history, as Ford positions itself for future growth by introducing new products.

Shares were down $1.08, or 6.5%, to $15.62 on Wednesday.

During a conference call with analysts and media, Chief Financial Officer Bob Shanks said 2014 pretax profit will be between $7 billion and $8 billion, down from about $8.5 billion this year. He said the principal cause will be lower profit in North America due to the rollout of 16 new vehicles during the coming year. The introductions will put Ford in a strong position for 2015, he noted.

"We've had four very strong years of financial results," Shanks said. "We're going to have an increase in global market share this year that's quite meaningful. We do expect coming out of '14 that we will see improving results and improving volume."

Shanks said 2014 will mark the best or second best year for Ford in the past 10 years. But he noted: "Our business is not linear, I've said this over and over again." Spending on new products during the recession enabled Ford to continue growing, he said.

"We are committed to be a much bigger player in the business," he said. "Thats exactly what were doing now -- we're investing in the business everywhere. We have a lot of investments. They will effect, particularly in North America, volume."

In 2014, he said, product rollouts will mean reduced volume in some cases and the need for higher incentives on vehicle models that are being closed out. Also, Ford will confront production capacity limitations during the year.

"We're projecting a growing industry next year (but) there are certain vehicle lines we probably will be building everything we can," Shanks said.

Shanks said the product introductions will come more heavily in the second half of the year. Capital expenditure in 2014 will be $7.5 billion, up substantially from 2013.

Globally, Ford said it expects 2014 losses in Europe to narrow, equal results in South America but with risk in Venezuela and Argentina, and similar pretax profit in Asia Pacific.

"Europe is very much about growth and about getting more out of the business top line than we have in the past," Shanks said. "We fully expect to be profitable in Europe in 2015," he said.

In Asia Pacific, Ford will pay a price for growth in 2014. "We have grown so much in Asia Pacific over the last several years; it's been quite strong," Shanks said. "As we move into next year we expect still to grow in Asia Pacific (but) you will see rising costs. You will see an improvement in the top line, you just won't see the same rate next year as you see this year."

A change for Ford in 2014 will be that it will begin to separately report Middle East and Africa results.

-- Written by Ted Reed in Charlotte, N.C.

To contact this writer, click here.

Follow @tedreednc



Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,960.57 -123.23 -0.72%
S&P 500 1,978.34 -9.64 -0.48%
NASDAQ 4,449.5640 -22.5440 -0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs