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Ford cuts 2024 earnings guidance due to warranty costs and slow pace of cost cutting
Securities Lawyers |
2024/10/26 08:47
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Stubbornly high warranty expenses and lagging cost-cutting efforts are holding back Ford Motor Co.'s profits this year, causing the company to lower its full-year earnings guidance.
That pushed the company’s stock price down 6% in trading after Monday’s closing bell.
The Dearborn, Michigan, automaker, which reported third-quarter earnings Monday, said its net profit tumbled nearly 26% as it took $1 billion in accounting charges to write down assets for a canceled three-row electric SUV.
Ford said it made $892 million from July through September, compared with $1.2 billion it made a year earlier.
But excluding the one-time items, the company made an adjusted pretax profit of $2.6 billion, or 49 cents per share. That beat analyst estimates of 46 cents, according to FactSet.
Revenue rose 5.5% to $46.2 billion, also beating Wall Street predictions. Ford reduced its full-year pretax income guidance to $10 billion, at the low end of the $10 billion to $12 billion it expected at the end of the second quarter, spooking investors.
“Cost, especially warranty, has held back our earnings power, but as we bend that curve, there is significant financial upside for investors,” CEO Jim Farley told analysts on a conference call.
Chief Financial Officer John Lawler said warranty costs were slightly below the third quarter of last year, but still high. The company wouldn’t give numbers until it files its quarterly report with securities regulators on Tuesday but said costs will be higher than a year ago.
Ford reported $800 million of increased warranty costs for the second quarter of this year.
Farley has been trying to get a handle on warranty costs for the past four years. In October of 2020, he said the company was working to cut quality-related repairs after glitch-prone small-car transmissions hit the automaker’s bottom line.
Ford has said that it has a $7 billion cost gap with competitors, and Lawler said Monday it has made progress on that figure. The problem is competitors, which he did not identify, are cutting costs too. “We’ve taken cost out, but we’re not doing it at a pace faster than our competition,” he told analysts.
Ford has removed $2 billion in material, freight and labor costs this year, but that was offset by warranties and inflation at its Turkish joint venture, he said.
He said Ford is focused on reducing warranty and other costs, which will show up in later quarters.
The company’s plans are working, as evidenced by 10 straight quarters of revenue growth, Lawler said.
Farley said Ford has restructured its operations in Europe, South America, India and China, which collectively lost $2.2 billion in 2018 but together are profitable now. For instance, China, including exports, has contributed over $600 million to pretax earnings this year, Farley said. |
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Trial turns testy as Trump lawyers try to pique fixer-turned-witness
Securities Lawyers |
2024/05/24 15:18
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After approximately five weeks, 19 witnesses, reams of documents and a dash of salacious testimony, the prosecution against Donald Trump rested its case Monday, handing over to the defense before closing arguments expected next week.
Trump’s team immediately sought to undermine key testimony against the former president, who is accused of covering up hush money paid to a porn star over an alleged encounter that could have derailed his successful 2016 White House bid.
His attorneys called lawyer Robert Costello — who once advised star prosecution witness Michael Cohen before falling out with him — in an apparent attempt to puncture Cohen’s credibility.
But Costello’s start on the stand was shaky at best, as his dismissive tone provoked an angry response from Judge Juan Merchan.
Merchan chided Costello for remarking “jeez” when he was cut off by a sustained objection and, at another point, “strike it.” Merchan told him: “I’m the only one that can strike testimony in the courtroom. Do you understand that?”
"And then if you don’t like my ruling, you don’t give me side eye and you don’t roll your eyes.”
Merchan was about to bring the jury back in when he asked Costello, “Are you staring me down right now?” and then kicked out the press to further admonish him.
"I’m putting you on notice that your conduct is contemptuous,” Merchan said, according to the transcript of the conversation that occurred when the press was out of the room. ”If you try to stare me down one more time, I will remove you from the stand.”
Costello didn’t return a message seeking comment Monday night.
Trump, speaking to reporters afterward, called the episode “an incredible display,” branding the proceedings “a show trial” and the judge “a tyrant.”
Extended quibbling among the two legal teams, along with the upcoming holiday weekend, means closing arguments that the judge had hoped could start Tuesday are now anticipated for next week.
It’s unlikely and risky, but the door remains open for Trump to take the stand in the criminal trial, the first ever of a former US president.
Experts doubt he will, as it would expose him to unnecessary legal jeopardy and forensic cross-examination by prosecutors — but his lawyer Todd Blanche has raised the prospect.
On Monday, Blanche finished his third day of questioning Cohen after hours of at times digressive, at other times bruising, exchanges.
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Supreme Court restores Trump to ballot, rejecting state attempts to ban him
Securities Lawyers |
2024/04/15 14:36
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The Supreme Court on Monday allowed a lawsuit to go forward against a Black Lives Matter activist who led a protest in Louisiana in which a police officer was injured. Civil rights groups and free speech advocates have warned that the suit threatens the right to protest.
The justices rejected an appeal from DeRay Mckesson in a case that stems from a 2016 protest over the police killing of a Black man in Baton Rouge.
At an earlier stage of the case, the high court noted that the issue was “fraught with implications for First Amendment rights.”
The justices did not explain their action Monday, but Justice Sonia Sotomayor wrote a brief opinion that said lower courts should not read too much into it.
The court’s “denial today expresses no view about the merits of Mckesson’s claim,’' Sotomayor wrote.
At the protest in Baton Rouge, the officer was hit by a “rock-like” object thrown by an unidentified protester, but he sued Mckesson in his role as the protest organizer.
A federal judge threw out the lawsuit in 2017, but a panel of the 5th U.S. Circuit Court of Appeals ruled 2-1 that the officer should be able to argue that Mckesson didn’t exercise reasonable care in leading protesters onto a highway, setting up a police confrontation in which the officer, identified in court papers only as John Doe, was injured.
In dissent, Judge Don Willett wrote, “He deserves justice. Unquestionably, Officer Doe can sue the rock-thrower. But I disagree that he can sue Mckesson as the protest leader.”
If allowed to stand, the decision to allow the suit to proceed would discourage people from protesting, the American Civil Liberties Union wrote, representing Mckesson.
“Given the prospect that some individual protest participant might engage in law-breaking, only the most intrepid citizens would exercise their rights if doing so risked personal liability for third-parties’ wrongdoing,” the ACLU told the court.
Lawyers for the officer had urged the court to turn away the appeal, noting that the protest illegally blocked the highway and that Mckesson did nothing to dissuade the violence that took place. |
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A Supreme Court ruling in a social media case could set standards
Securities Lawyers |
2024/03/18 17:04
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In a busy term that could set standards for free speech in the digital age, the Supreme Court on Monday is taking up a dispute between Republican-led states and the Biden administration over how far the federal government can go to combat controversial social media posts on topics including COVID-19 and election security.
The justices are hearing arguments in a lawsuit filed by Louisiana, Missouri and other parties accusing officials in the Democratic administration of leaning on the social media platforms to unconstitutionally squelch conservative points of view. Lower courts have sided with the states, but the Supreme Court blocked those rulings while it considers the issue.
The high court is in the midst of a term heavy with social media issues. On Friday, the court laid out standards for when public officials can block their social media followers. Less than a month ago, the court heard arguments over Republican-passed laws in Florida and Texas that prohibit large social media companies from taking down posts because of the views they express.
The cases over state laws and the one being argued Monday are variations on the same theme, complaints that the platforms are censoring conservative viewpoints. The states argue that White House communications staffers, the surgeon general, the FBI and the U.S. cybersecurity agency are among those who coerced changes in online content on Facebook, X (formerly Twitter) and other media platforms.
“It’s a very, very threatening thing when the federal government uses the power and authority of the government to block people from exercising their freedom of speech,” Louisiana Attorney General Liz Murrill said in a video her office posted online.
The administration responds that none of the actions the states complain about come close to problematic coercion. The states “still have not identified any instance in which any government official sought to coerce a platform’s editorial decisions with a threat of adverse government action,” wrote Solicitor General Elizabeth Prelogar, the administration’s top Supreme Court lawyer. Prelogar wrote that states also can’t “point to any evidence that the government ever imposed any sanction when the platforms declined to moderate content the government had flagged — as routinely occurred.”
The companies themselves are not involved in the case.
Free speech advocates say the court should use the case to draw an appropriate line between the government’s acceptable use of the bully pulpit and coercive threats to free speech. |
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Supreme Court casts doubt on GOP-led states’ efforts to regulate social media
Securities Lawyers |
2024/03/01 11:11
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The Supreme Court cast doubt Monday on state laws that could affect how Facebook, TikTok, X, YouTube and other social media platforms regulate content posted by their users. The cases are among several this term in which the justices could set standards for free speech in the digital age.
In nearly four hours of arguments, several justices questioned aspects of laws adopted by Republican-dominated legislatures and signed by Republican governors in Florida and Texas in 2021. But they seemed wary of a broad ruling, with Justice Amy Coney Barrett warning of “land mines” she and her colleagues need to avoid in resolving the two cases.
While the details vary, both laws aimed to address conservative complaints that the social media companies were liberal-leaning and censored users based on their viewpoints, especially on the political right.
Differences on the court emerged over how to think about the platforms — as akin to newspapers that have broad free-speech protections, or telephone companies, known as common carriers, that are susceptible to broader regulation.
Chief Justice John Roberts suggested he was in the former camp, saying early in the session, “And I wonder, since we’re talking about the First Amendment, whether our first concern should be with the state regulating what we have called the modern public square?”
Justices Samuel Alito and Clarence Thomas appeared most ready to embrace arguments made by lawyers for the states. Thomas raised the idea that the companies are seeking constitutional protection for “censoring other speech.”
Alito complained about the term “content moderation” that the sites employ to keep material off their platforms.
“Is it anything more than a euphemism for censorship?” he asked, later musing that term struck him as Orwellian. But Justice Brett Kavanaugh, seemingly more favorable to the companies, took issue with calling the actions of private companies censorship, a term he said should be reserved for restrictions imposed by the government.
“When I think of Orwellian, I think of the state, not the private sector, not private individuals,” Kavanaugh said.
The precise contours of rulings in the two cases were not clear after arguments, although it seemed likely the court would not let the laws take effect. The justices posed questions about how the laws might affect businesses that are not their primary targets, including e-commerce sites like Uber and Etsy and email and messaging services. |
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Investment Fraud Litigation |
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Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Securities Arbitration. Generally speaking, securities fraud consists of deceptive practices in the stock and commodity markets, and occurs when investors are enticed to part with their money based on untrue statements.
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The content contained on the web site has been prepared by Securities Law News as a service to the internet community and is not intended to constitute legal advice or a substitute for consultation with a licensed legal professional in a particular case. | Affordable Law Firm Website Design by Law Promo |
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