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Source:
The Associated Press

Ford cuts yearly outlook, plans new cuts

Tuesday, June 21, 2005

ASSOCIATED PRESS

DEARBORN -- Ford Motor Co. on Tuesday lowered its earnings outlook for the full year, citing continued weakness at its North American operations, and announced plans to further reduce its management ranks.


Ford said it now expects to earn $1 to $1.25 per share, 25 cents lower than its previous forecast issued in April. The company said the profit outlook for its North American operations has weakened over the last two months, and added that "continued supplier-related challenges" will also affect results.


Ford will also eliminate the 2005 bonuses for salaried management employees, and suspend the matching grant in its 401(k) for salaried employees effective July 1.


Analysts appear to have viewed Ford's earlier forecast for earnings of $1.25 to $1.50 per share as too optimistic, based on the average estimate of $1.16 per share carried in a survey by Thomson Financial.


Ford also said it was taking new steps to reduce salaried-related costs this year. The company will cut salaried positions at its North American operations by 5 percent and reduce the use of agency and purchased services by 10 percent. The new cuts come atop 1,000 salaried job cuts announced in April.


Ford shares rose 6 cents to close at $11.17 Tuesday on the New York Stock Exchange, then fell 3 cents in extended trading. Ford cut its outlook after the markets closed.
 
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