Is Ford Motor Company (NYSE: F) In Distress?

Posted by Peter Lauro December 18, 2014 0 Comment 2047 views

Ford Motor Company (NYSE: F) is preparing a product that should help it get over rivals, especially in the mass auto market. The aluminum-bodied F-150 pickup truck is a product that has generated a lot of interests and excitements in the company and in the market. However, there is trouble down the road, and uncertainty is catching up with the company. The problem is not the U.S. or China where the company is aggressively trying to bolster its market share, but Russia where things are almost falling apart.

Russia hurts earnings at Ford

Russia is the sixth-largest economy of the world. As such, it is an important market for multinational corporations such as Ford Motor Company (NYSE:F). In its most recent earnings report, 3Q, Ford raised the alarm over the challenges in Russia. As a matter of fact, the company withdrew its profit forecast for Europe because of the increasingly challenging Russian situation. The company reported that it was encountering hefty expenses in the Russian operations, which offset uptick in European revenue.

Ford earned 3Q profit of $835 million, which declined from $1.27 billion in the cialis generic same period

a year earlier. It revenue came in at $34.9 billion, which was 2.5% short of the comparable quarter last year. The challenge in the quarter came in the form of low sales and higher expenses. Its losses in Europe increased in the quarter to $439 million from $257 million last ordering viagra online year, mostly because of the cited hefty expenses in Russia.

Trouble with ruble

Although Ford has already marked the situation in Russia as challenging and fluid, it seems the worst is yet to come. Russia’s ruble has continued to plummet this week against the dollar, further exerting pressure on the U.S. companies with significant exposure to the market. The fallout in ruble means that prices of items will likely go up, which is also expected to impact sales as disposable income for Russians decline.

Additionally, declining ruble means that companies such as Ford Motor Company (NYSE:F) that have significant operation

in Russia but report in the U.S. dollar are likely to face negative foreign exchange impact in their earnings.

Distress for global businesses

Russia’s economic troubles are attributed to plavix half life the trade sanctions that the country is facing over its military actions in Ukraine. The fallout in the oil industry where prices are declining is also hurting the economy given that the country draws a significant amount of its revenue from petroleum.

Ford Motor Company (NYSE:F) is not alone amid the economic online pharmacy reviews woes levitra side effects alcohol in Russia. General Motors Company (NYSE:GM) is another U.S. automaker

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that has cialis vs viagra sounded the alarm over the Russian situation. The company recently moved to write off $200 million in sales cost in Russia. From the U.S. to Europe and across multiple sectors of the global economy, Russia is causing distress for businesses.

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