Investors hit the brakes on Ford shares after the automaker warned that its earnings in the current quarter would fall shy of analysts estimates amid rising costs.
Shares in the Dearborn, Michigan-based company fell 2.6 per cent in pre-market trading to $11.46 after the company said in a filing with the Securities and Exchange Commission that it expects to report adjusted earnings in the range of 30 to 35 cents a share in the first quarter, below analysts’ estimates of 47 cents.
The projected figure is also sharply lower than Ford’s adjusted earnings of 68 cents in the first quarter of 2016.
The automaker also expects adjusted pre-tax profit of $9bn this year, down from the $10.4bn recorded in 2016 as a result of “planned investments”. However Ford added the figure is then expected to “improve” in 2018.
Ford cited higher costs, including rising commodity prices and investments in emerging opportunities, lower fleet volume and unfavourable exchange rate for the move.
The automaker said last month it would invest $1bn over the next five years in a new driverless car unit Argo, led by two engineers who were previously at Google and Uber. The automaker has set a goal of launching commercial autonomous vehicles by 2021.
Ford like other US automakers has also been pressured by US president Donald Trump to retain manufacturing jobs in the US.
Ford shares are down nearly 3 per cent so far this year following a 14 per cent drop last year.