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DETROIT (Reuters) -Ford Motor Co on Thursday withdrew its full-year results forecast due to the pending ratification of its deal with the United Auto Workers (UAW) union, and warned of higher losses on electric vehicles, sending shares of the company down nearly 5% after-hours.
The union and Ford on Wednesday reached a tentative agreement that included a 25% wage hike for 57,000 workers over 4-1/2 years, ending a strike at some of the automaker’s biggest factories.
Ford Chief Financial Officer John Lawler in a media briefing on Thursday said the company will delay some of its planned multibillion-dollar investment in new EV production capacity, citing “tremendous downward pressure” on prices.
Like many of its competitors, Ford is “trying to find the balance between price, margin and EV demand,” Lawler said.
Rival General Motors earlier this week also withdrew its 2023 results forecast and said it would delay by a year the opening of an electric truck plant in Michigan.
Ford’s adjusted third-quarter earnings per share of 39 cents missed the Wall Street average target of 45 cents, according to LSEG data.
Ford said its EV unit posted a higher-than-expected loss in earnings before interest and taxes of $1.3 billion. The company has forecast a full-year loss of $4.5 billion for the Ford Model e unit.
The automaker said its EV business was experiencing “sharply compressed” prices and profitability, and said customers were not willing to pay a premium for EVs over comparable combustion and hybrid models.
Ford’s third-quarter revenue rose 11% to $44 billion, with profit of $1.2 billion compared with a year-earlier loss of $827 million.
The automaker said its Ford Pro commercial vehicle business and Ford Blue combustion and hybrid vehicle business both posted higher year-on-year revenue, EBIT and EBIT margins.
The total economic loss from the strikes at the Detroit Three automakers has reached $9.3 billion, consultancy Anderson Economic Group said earlier this week.
Reporting by Paul Lienert in Detroit and Nathan Gomes and Abhijith Ganapavaram in Bengaluru Editing by Devika Syamnath, Peter Henderson and Matthew Lewis
