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Ford cuts 2024 earnings guidance due to warranty costs and slow pace of cost cutting
Legal PR |
2024/10/26 22:51
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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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Kenya’s deputy president pleads not guilty in impeachment process
Legal PR |
2024/10/22 14:50
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Kenya’s deputy president, who faces impeachment, pleaded not guilty in a senate hearing Wednesday to all allegations including corruption, inciting ethnic divisions and support for anti-government protests that saw demonstrators storm the country’s parliament.
Deputy President Rigathi Gachagua, who has called the allegations politically motivated, could be the first sitting deputy president impeached in Kenya.
The case highlights the friction between him and President William Ruto — something that Ruto once vowed to avoid after his past troubled relationship as deputy to Kenya’s previous president, Uhuru Kenyatta.
Gachagua has said he believes the impeachment process has Ruto’s blessing, and has asked legislators to make their decision “without intimidation and coercion.”
The tensions risk introducing more uncertainty for investors and others in East Africa’s commercial hub. Court rulings this week allowed the parliament and senate to proceed with the impeachment debate, despite concerns over irregularities raised by the deputy president’s lawyers.
The impeachment motion was approved in parliament last week and forwarded to the senate. Gachagua’s legal team will have Wednesday and Thursday to cross-examine witnesses, and the senate will vote Thursday evening.
Under the Kenyan Constitution, the removal from office is automatic if approved by both chambers, though Gachagua can challenge the action in court — something he has said he would do.
Kenya’s president has yet to publicly comment on the impeachment process. Early in his presidency, he said he wouldn’t publicly humiliate his deputy.
Ruto, who came to office claiming to represent Kenya’s poorest citizens, has faced widespread criticism for his efforts to raise taxes in an effort to find ways to pay off foreign creditors. But the public opposition led him to shake up his cabinet and back off certain proposals. |
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Venezuela’s Supreme Court certifies Maduro’s claims that he won presidential election
Legal PR |
2024/08/25 16:22
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Venezuela’s Supreme Court has backed President Nicolás Maduro’s claims that he won last month’s presidential election and said voting tallies published online showing he lost by a landslide were forged.
The ruling is the latest attempt by Maduro to blunt protests and international criticism that erupted after the contested July 28 vote in which the self-proclaimed socialist leader was seeking a third, six-year term.
The high court is packed with Maduro loyalists and has almost never ruled against the government.
Its decision, read Thursday in an event attended by senior officials and foreign diplomats, came in response to a request by Maduro to review vote totals showing he had won by more than 1 million votes.
The main opposition coalition has accused Maduro of trying to steal the vote.
Thanks to a superb ground game on election day, opposition volunteers managed to collect copies of voting tallies from 80% of the 30,000 polling booths nationwide and which show opposition candidate Edmundo González won by a more than 2-to-1 margin.
The official tally sheets printed by each voting machine carry a QR code that makes it easy for anyone to verify the results and are almost impossible to replicate.
“An attempt to judicialize the results doesn’t change the truth: we won overwhelmingly and we have the voting records to prove it,” González, standing before a Venezuelan flag, said in a video posted on social media.
The high court’s ruling certifying the results contradicts the findings of experts from the United Nations and the Carter Center who were invited to observe the election and which both determined the results announced by authorities lacked credibility. Specifically, the outside experts noted that authorities didn’t release a breakdown of results by each of the 30,000 voting booths nationwide, as they have in almost every previous election.
The government has claimed — without evidence — that a foreign cyberattack staged by hackers from North Macedonia delayed the vote counting on election night and publication of the disaggregated results.
González was the only one of 10 candidates who did not participate in the Supreme Court’s audit, a fact noted by the justices, who in their ruling accused him of trying to spread panic.
The former diplomat and his chief backer, opposition powerhouse Maria Corina Machado, went into hiding after the election as security forces arrested more than 2,000 people and cracked down on demonstrations that erupted spontaneously throughout the country protesting the results.
Numerous foreign governments, including the U.S. as well as several allies of Maduro, have called on authorities to release the full breakdown of results.
Gabriel Boric, the leftist president of Chile and one of the main critics of Maduro’s election gambit, lambasted the high court’s certification. |
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Americans are ‘getting whacked’ by too many laws and regulations, Gorsuch says
Legal PR |
2024/08/02 01:13
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Ordinary Americans are “getting whacked” by too many laws and regulations, Supreme Court Justice Neil Gorsuch says in a new book that underscores his skepticism of federal agencies and the power they wield.
“Too little law and we’re not safe, and our liberties aren’t protected,” Gorsuch told The Associated Press in an interview in his Supreme Court office. “But too much law and you actually impair those same things.”
“Over Ruled: The Human Toll of Too Much Law” is being published Tuesday by Harper, an imprint of HarperCollins Publishers. Gorsuch has received a $500,000 advance for the book, according to his annual financial disclosure reports.
In the interview, Gorsuch refused to be drawn into discussions about term limits or an enforceable code of ethics for the justices, both recently proposed by President Joe Biden at a time of diminished public trust in the court. Justice Elena Kagan, speaking a couple of days before Biden, separately said the court’s ethics code, adopted by the justices last November, should have a means of enforcement.
But Gorsuch did talk about the importance of judicial independence. “I’m not saying that there aren’t ways to improve what we have. I’m simply saying that we’ve been given something very special. It’s the envy of the world, the United States judiciary,” he said.
The 56-year-old justice was the first of three Supreme Court nominees of then-President Donald Trump, and they have combined to entrench a conservative majority that has overturned Roe v. Wade, ended affirmative action in college admissions, expanded gun rights and clipped environmental regulations aimed at climate change, as well as air and water pollution more generally.
A month ago, the Supreme Court completed a term in which Gorsuch and the court’s five other conservative justices delivered sharp rebukes to the administrative state in three major cases, including the decision that overturned the 40-year-old Chevron decision that had made it more likely that courts would sustain regulations. The court’s three liberal justices dissented each time. |
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Boston lawyer once named ‘most eligible bachelor’ is sentenced to 5-10 years
Legal PR |
2024/07/15 06:42
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A former Boston lawyer and prosecutor who was once named one of People magazine’s most eligible bachelors was sentenced Monday to between five and 10 years in state prison for rape.
Gary Zerola, 52, was found guilty last month after a jury deliberated for five hours and has been incarcerated since then. He was acquitted of a greater charge of aggravated rape and burglary.
Prosecutors said that Zerola, in January 2021, paid more than $2,000 for a night of drinking with a woman he was dating and her 21-year-old friend who’d just graduated from college. The friend became intoxicated and had to be helped back to her Beacon Hill apartment. Zerola later entered the apartment without permission and sexually assaulted the woman around 2 a.m. while she was sleeping, prosecutors said.
In a victim impact statement that was read in court, the woman said she’d tried desperately to not allow the incident to affect her, or to give Zerola any power over the rest of her life. But she said that participating in the trial had brought up “the significant and insidious effect this event has had on my life.”
“For months after the incident, I experienced nightly recurring nightmares reliving the assault. Even today, I still have nightmares of someone breaking into my apartment and trying to assault me,” the woman wrote. The Associated Press does not generally name victims of sexual assault.
“These cases are always difficult, and this victim deserves enormous credit for taking the stand and telling the jury what happened to her that night,” Suffolk District Attorney Kevin Hayden said in a statement after the verdict.
Zerola’s attorney Joseph Krowski Jr. said Monday that his client is appealing the conviction. He said the sentence wasn’t what they wanted, but was within or close to the recommended guideline range for somebody without a previous criminal record. He pointed out that Zerola had been acquitted on two of the three original charges.
Krowski Jr. said his client was doing “as well as could be expected under the circumstances” and was going to put his time to good use and come out of the experience for the better.
Zerola had previously been accused of other sexual assaults but wasn’t convicted in those cases. He had faced two rape charges in Suffolk County and was acquitted in 2023, according to the district’s attorney’s office. He also was charged in three sexual assault cases between 2006 and 2007, but was not convicted.
Zerola worked as an assistant district attorney in Essex County for one year, and in Suffolk County for two months in 2000, according to former District Attorney Rachael Rollins’ office. He was arrested in January 2021. |
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