CEO Mark Fields told investors on Monday the company now expects pretax profit in the range of $6 billion to $7 billion, an approximately $1.5 billion decrease from what the company had forecast in July.
Ford's guidance implies North American operating margins in the range of 8% to 9%, down from 11% in the last quarter.
Furthermore, Ford anticipates a $1.2 billion pretax loss in Europe in 2014, which would continue into 2015 at a reduced rate. The company also stated it no longer expects European demand to climb back up to the levels it reached before the recession, even by 2020.
Fields cited increasing problems in emerging auto markets and costs tied to both quality issues and U.S. recalls as the reasons for the reduction. Ford has dealt with an approximately $1 billion bill from warranty and recall costs, as well as $300 million from declines in Russia. The company also had a loss in South America that was $900 million greater than previously expected.
Ford has recalled 3.9 million U.S. vehicles thus far in 2014.
Separately, TheStreet Ratings team rates FORD MOTOR CO as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate FORD MOTOR CO (F) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
- You can view the full analysis from the report here: F Ratings Report