Ford shares plummet after profits warning

Ford saw its shares fall to their lowest level in more than a year today after becoming the second US car giant in weeks to shock investors with a profits warning.

Ford’s stock fell 6.1%, or 67 cents, to 10.36 US dollars in early trading on the New York Stock Exchange after saying late on Friday that it did not expect to meet its profit goals in 2005 or 2006.

The world’s second biggest car manufacturer lowered its full-year profit forecast to between 1.25 dollars and 1.50 dollars per share from between 1.75 dollars and 1.95 dollars per share.

It also said it did not expect to reach its target of hitting 7 billion dollars in pre-tax profits by 2006.

Last month, GM dismayed shareholders by predicting first quarter losses and cutting its full-year earnings targets in the wake of lower North American sales and price cuts.

Ford employs around 14,200 people in Britain at sites including its UK head office at Brentwood, Dagenham, Bridgend in south Wales, Southampton, Halewood, Dunton in Essex, Daventry and Leamington.

The company’s Premier Automotive Group, which includes brands such as Land Rover, Jaguar, Aston Martin and Volvo, employs about 16,500 staff in the UK at sites including Solihull and Castle Bromwich in Birmingham and Halewood.

Despite launching a range of new vehicles in the past year, Ford and GM have struggled with medical and raw material costs and heavy competition from overseas car makers, particularly Asian brands such as Toyota and Nissan.

Merrill Lynch analyst John Casesa said Ford’s action was expected, but that the magnitude of the cut was surprising.