Ford Motor Co. (NYSE: F) announced its estimates for the first-quarter earnings of 2017. Due to the higher spending on commodities, warranties and investments, the company expected the earnings in the first quarter to be below estimates, and the pretax profit in 2017 would also be lower.
In a recent filing with SEC, Ford said that the adjusted pretax profit is expected to be around $9 billion in 2017, which was lower than the numbers in 2016, but the company expected the numbers to improve in 2018. Earnings per share in the first quarter of 2017 is expected to be between $0.30 and $0.35 per share, which is lower than consensus estimates of $0.47 per share.
During an investor’s presentation by Bob Shanks, the Chief Financial Officer of Ford, the company said that U.S. auto industry should drop from 17.9 million units in 2016 to 17.7 million units in 2017, and in 2018, the company expected sales to be 17.5 million units.
As for the auto sales in China, the company expected it to drop to 27.2 million in 2017 from the 27.5 million in 2016. Currently, China is the world’s largest car market.
“When you think about the year-over-year decline on a full-year basis, going from $10.4 billion to $9 billion, that’s basically going to happen in the first quarter,” Bob said in the statement. “That’s why we’ve got the gap and we think from this point forward the comparisons will be more in line with what we saw last year.”
After the announcement, shares of Ford dropped 1.8% to $11.55 per share in early trading Thursday.