DETROIT: Ford Motor Co on Tuesday confirmed that it would be less profitable in 2017 than last year, even as cross town rival General Motors Co on the same day gave a much more upbeat forecast that surpassed Wall Street expectations.
Ford, the second largest U.S. automaker, affirmed that it was on track to deliver about $10.2 billion in adjusted pretax profit in 2016, matching a forecast it gave previously.
Ford shares initially rose 0.5 percent in extended trading but by early Tuesday evening were flat with their closing value of $12.85. GM shares were also trading near their close of $37.35, up 3.7 percent from the previous day.
Ford said profit would improve in 2018 but in 2017 the company would be pressured as it increased spending on "emerging opportunities" including self-driving cars and a rise in other costs.
The company last week said it was on course to deliver a "high-volume, fully autonomous vehicle for ride sharing in 2021" and a fully electric small SUV with a range of at least 300 miles on a full charge.
GM, the largest U.S. automaker, said it expected 2017 earnings per share in a range of $6 to $6.50. Analysts had, on average, predicted the company would post EPS this year of $5.76, according to Thomson Reuters I/B/E/S.
Ford on Tuesday declared a first-quarter regular dividend of $0.15 per share and a $200 million supplemental cash dividend, or an additional $0.05 per share. The regular dividend matched that of the first quarter of 2016, but the supplemental dividend was below the $0.25 per share payout announced a year ago.
Chief Executive Mark Fields in comments to Wall Street analysts at a meeting webcast from Detroit said the adjusted operating effective tax rate in 2016 was expected to be 32 percent. That was up from an expectation a few months ago for a 2016 tax rate of 28.5 percent, said Ford Chief Financial Officer Bob Shanks.
Shanks said that for 2017, Ford expected the adjusted operating tax rate to be about 30 percent.