What the "F"? Ford Motor Co. shareholders watched in horror today as their stock dropped 6% Wednesday while the rest of the market charged upward. Ford management issued a press release saying their goals to hit 8%-9% operating profit margin by 2016 are at serious risk and that 2014 earnings won't be as strong as once forecast.
Who's guilty here? Venezuela, for one. Ford expects a currency devaluation for Venezuela's currency, the Bolivar. The problem is, Ford's got a major assembly plant there and a devaluation would have a negative $350 million effect on the company's earnings next year.
Asian competition in America is another reason for reduced profit expectations. Toyota execs must be furious that Ford's sexy Fusion sedan is creeping into the Camry's 12-year rule as the top-selling car in America. Fierce competition from Asian car manufacturers will put pressure on Ford's North American profits as well. Finally, Ford reiterated that it's very tough to sell cars in Europe right now.
To sum it up, Ford's been rocking since 2010 and its stock is up 41% in the last 12 months. But it is required by law to disclose all relevant information to shareholders that could affect profits -- shareholders were weeping while the rest celebrated the positive signal of the end of the Fed's emergency stimulus policy. A reduced earnings future for Ford had investors fleeing from the stock.
- Weekly Jobless Claims
- Existing Home Sales
- Philadelphia Regional Manufacturing Survey
The article S&P 500 Celebrates the Fed's Decision... All Except Ford Motor Co. originally appeared on Fool.com.Fool contributors Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.