Ford's reorganization plans showed up in its fourth-quarter earnings Wednesday as pension and layoff costs eroded the company's profit and caused it to miss earnings estimates — despite posting stronger-than-expected sales.
The Detroit automaker has been struggling overseas, and that was apparent in the fourth quarter. While Ford grew its revenue in North America by $1.7 billion, it fell in every other region across the globe. It lost market share in every major market in South America except Peru. Unfavorable exchange rates and a drop in sales volume also hurt Ford's bottom line, especially in Europe and Asia.
Ford also faced pressure on several other fronts during the quarter and last year, executives said. Tariffs cost the automaker $750 million in 2018 while higher commodities prices shaved $1.1 billion from its bottom line. It also took a $750 million hit last year from unfavorable foreign exchange rates and ate $775 million in costs related to recalls announced last year in North America, Chief Financial Officer Bob Shanks told analysts on a conference call discussing the results.
"Certainly it's been a challenging year," CEO Jim Hackett said on the call. He noted "headwinds outside of our control and frankly, poor performance in some parts of the business which we have now taken action to address."