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Ford Sees Profits Declining in 2017

September 14, 2016

Most U.S. Autos on Lots Since 2005 Has Ford Lead Output CutMost U.S. Autos on Lots Since 2005 Has Ford Lead Output Cut
A Ford dealership in East Peoria, Illinois.Photograph by Daniel Acker—Bloomberg via Getty Images

Ford Motor’s 2017 financial performance will decline from this year’s results, because of increased spending on “emerging opportunities” and other costs, the No. 2 U.S.-based automaker said on Wednesday.

Last week, Ford (F) lowered its 2016 pretax profit forecast to $10.2 billion from at least $10.8 billion because of a charge in the third quarter for an expanded vehicle recall.

 

This will “offset the vast majority of costs being added to strengthen Ford’s business,” but will not be enough to offset higher regulatory and vehicle development costs for what it calls emerging opportunities, such as electric vehicles.

Ford disclosed the financial outlook ahead of presentations later in the day to Wall Street analysts in Dearborn, Michigan, where it is headquartered.

The automaker said automotive capital expenditures will rise to 5.6% of automotive revenue in 2018, from 4.9% in 2016. It will decline after 2018, Ford said.