Ford Shares Slump on Profit Outlook Despite Special Dividend

  • Automaker declares supplemental payout of $1 billion
  • North American operating margin of at least 9.5% forecast

Ford Motor Co. fell as concerns that its North American profit margins may contract this year outweighed the announcement of a $1 billion dividend and record results in 2015.

The automaker’s shares slid 3.3 percent in extended trading to $12.43 at 6:25 p.m. in New York, after closing up 0.6 percent to $12.85.

Automotive revenue and operating profit margin in 2016 will be equal to or higher than last year, with a North American margin of 9.5 percent or higher, the company said in a statement Tuesday. Through three quarters of last year, the region’s margin was 10.9 percent. Ford said it will report 2015 pretax operating profit on the high end of its forecast of $10 billion to $11 billion.

“I suspect the 9.5 percent North American margin number is not being well received,” David Whiston, an automotive analyst with Morningstar Inc. in Chicago, said in an e-mail. “It could mean a year-on-year decline versus 2015.”

Ford’s board declared the special dividend of 25 cents a share in addition to the regular, unchanged quarterly payout of 15 cents. Both are payable March 1 to stockholders as of Jan. 29. The automaker will report fourth-quarter and full-year financial results Jan. 28.

Record Sales

Surging sport utility vehicle and pickup sales in the U.S. helped Ford to its highest profit ever in North America through last year’s first nine months. Industrywide U.S. deliveries set a record for the full year, and Ford last week said it expected to report 2015 pretax profit of $10 billion to $11 billion, more than it had forecast.

“We are benefiting from six consecutive years of consistently strong results, and our performance is allowing us to reward our shareholders,” Chief Executive Officer Mark Fields said in the statement before speaking to investors at a Detroit conference sponsored by Deutsche Bank.

Sales of Ford’s F-150 pickup began taking off in 2015’s second half after the automaker spent almost two years converting two factories to build the truck with a lightweight, fuel-saving aluminum body. For the year, F-Series pickup sales rose 3.5 percent to 780,354, making it the top-selling vehicle in the U.S. for the 34th consecutive year.

Ford’s SUV sales climbed 7.8 percent in the U.S. last year as gasoline prices that ended the year at an average $2 a gallon spurred sales. SUVs are generally larger and more profitable that traditional sedans.

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