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Ford cuts 2024 earnings guidance due to warranty costs and slow pace of cost cutting
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2024/10/26 08:51
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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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New rules regarding election certification in Georgia to get test in court
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2024/09/30 07:41
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Two controversial new rules passed by Georgia’s State Election Board concerning the certification of vote tallies are set to face their first test in court this week.
The Republican majority on the State Election Board — made up of three members praised by former President Donald Trump praised by name at a recent rally — voted to approve the rules last month. Democrats filed a legal challenge and argue the rules could be used “to upend the statutorily required process for certifying election results in Georgia.”
A bench trial, meaning there is a judge but no jury, is set to begin Tuesday before Fulton County Superior Court Judge Robert McBurney.
One of the rules provides a definition of certification that includes requiring county officials to conduct a “reasonable inquiry” before certifying results, but it does not specify what that means. The other includes language allowing county election officials “to examine all election related documentation created during the conduct of elections.”
A series of recent appointments means Trump-endorsed Republicans have had a 3-2 majority on the State Election Board since May. That majority has passed several new rules over the past two months that have caused worry among Democrats and others who believe Trump and his allies may use them to cause confusion and cast doubt on the results if he loses this crucial swing state to Democratic Vice President Kamala Harris in November’s presidential election.
Another rule the board passed more recently requires that poll workers count the number of paper ballots — not votes — by hand on election night after voting ends. A separate lawsuit filed by a group headed by a former Republican lawmaker initially challenged the two certification rules but was amended last week to also challenge the ballot counting rule and some others that the board passed.
Georgia Secretary of State Brad Raffensperger and an association of county election officials had cautioned the state board against passing new rules so close to the election. They argued it could cause confusion among poll workers and voters and undermine public trust in the voting process.
The challenge to the certification rules filed by Democratic groups and others asks the judge to confirm that election superintendents — a multi-person election board in most counties — have a duty to certify an election by the deadline provided in the law and have no discretion to withhold or delay certification. They ask that it should be declared invalid if the judge believes either of the rules allows such discretion.
Lawyers for the State Election Board argue the Democrats are asking the judge to “declare what is already enshrined in Georgia law,” that county certification is mandatory and must occur by 5 p.m. the Monday after the election, or the next day if Monday is a holiday, as it is this year. They also argue the challenge is barred by the principle of sovereign immunity and seeks relief that isn’t appropriate under the law.
The challenge was filed by the state and national Democratic parties, as well as county election board members from counties in metro Atlanta, most chosen by the local Democratic Party, as well voters who support Democrats and two Democratic state lawmakers running for reelection. It was filed against the State Election Board, and the state and national Republican parties joined the fight on the board’s side.
The Democrats concede in their challenge that the two rules “could be read not to conflict with Georgia statutes” but they argue “that is not what the drafters of those rules intended.”
“According to their drafters, these rules rest on the assumption that certification of election results by a county board is discretionary and subject to free-ranging inquiry that may delay certification or render it wholly optional,” they wrote in a court filing.
They also note that numerous county election officials around the state have already sought to block or delay certification in recent elections and “the new rules hand those officials new tools to do so again in November.”
State lawyers argue that since the argument against the rules is based on the alleged intent of the people who presented them or the way some officials could interpret them, rather than on the text of the rules themselves, the challenge should be thrown out. |
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Algerian court certifies Tebboune’s landslide reelection win
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2024/09/14 11:07
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Algeria’s constitutional court on Saturday certified the landslide victory of President Abdelmadjid Tebboune in last weekend’s election after retabulating vote counts that he and his two opponents had called into question.
The court said that it had reviewed local voting data to settle questions about irregularities that Tebboune’s opponents had alleged in two appeals on Monday.
“After verification of the minutes of the regions and correction of the errors noted in the counting of the votes,” it had lowered Tebboune’s vote share and determined that his two opponents had won hundreds of thousands more votes than previously reported, said Omar Belhadj, the constitutional court’s president.
The court’s decision makes Tebboune the official winner of the Sept. 7 election. His government will next decide when to inaugurate him for a second term.
The court’s retabulated figures showed Tebboune leading Islamist challenger Abdellali Hassan Cherif by around 75 percentage points. With 7.7 million votes, the first-term president won 84.3% of the vote, surpassing 2019 win by millions of votes and a double-digit margin.
Cherif, running with the Movement of Society for Peace, won nearly 950,000 votes, or roughly 9.6%. The Socialist Forces Front’s Youcef Aouchiche won more than 580,000 votes, or roughly 6.1%.
Notably, both challengers surpassed the threshold required to receive reimbursement for campaign expenses. Under its election laws, Algeria pays for political campaigns that receive more than a 5% vote share. The results announced by the election authority last week showed Cherif and Aouchiche with 3.2% and 2.2% of the vote, respectively. Both were criticized for participating in an election that government critics denounced as a way for Algeria’s political elite to make a show of democracy amid broader political repression.
Throughout the campaign, each of the three campaigns emphasized participation, calling on voters and youth to participate and defy calls to boycott the ballot. The court announced nationwide turnout was 46.1%, surpassing the 2019 presidential election when 39.9% of the electorate participated.
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Alaska high court lets man serving a 20-year sentence remain in US House race
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2024/09/12 11:08
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The Alaska Supreme Court ruled Thursday that a man currently serving a 20-year prison sentence can remain on the November ballot in the state’s U.S. House race.
In a brief order, a split court affirmed a lower court ruling in a case brought by the Alaska Democratic Party; Justice Susan Carney dissented. A full opinion explaining the reasoning will be released later.
Democrats sued state election officials to seek the removal from the ballot of Eric Hafner, who pleaded guilty in 2022 to charges of making threats against police officers, judges and others in New Jersey.
Hafner, who has no apparent ties to Alaska, is running as a Democrat in a closely watched race featuring Democratic U.S. Rep. Mary Peltola and Republican Nick Begich. Hafner’s declaration of candidacy listed a federal prison in New York as his mailing address.
Under Alaska’s open primary system, voters are asked to pick one candidate per race, with the top four vote-getters advancing to the general election. Hafner finished sixth in the primary but was placed on the general election ballot after Republicans Lt. Gov. Nancy Dahlstrom and Matthew Salisbury, who placed third and a distant fourth, withdrew.
John Wayne Howe, with the Alaskan Independence Party, also qualified.
Attorneys for Alaska Democrats argued that there was no provision in the law for the sixth-place finisher to advance, while attorneys for the state said that interpretation was too narrow.
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Detroit judge sidelined for making sleepy teen wear jail clothes on court field trip
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2024/08/12 09:21
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A Detroit judge who ordered a teenager into jail clothes and handcuffs on a field trip to his courtroom will be off the bench while undergoing “necessary training,” the court’s chief judge said Thursday.
Meanwhile, the girl’s mother said Judge Kenneth King was a “big bully.”
“My daughter is hurt. She is feeling scared,” Latoreya Till told the Detroit Free Press.
She identified her daughter as Eva Goodman. The 15-year-old fell asleep in King’s court Tuesday while on a visit organized by a Detroit nonprofit.
King didn’t like it. But he said it was her attitude that led to the jail clothes, handcuffs and stern words.
“I wanted this to look and feel very real to her, even though there’s probably no real chance of me putting her in jail,” he explained to WXYZ-TV.
King has been temporarily removed from his criminal case docket and will undergo “necessary training to address the underlying issues that contributed to this incident,” said William McConico, the chief judge at 36th District Court.
The court “remains deeply committed to providing access to justice in an environment free from intimidation or disrespect. The actions of Judge King on August 13th do not reflect this commitment,” McConico said.
He said the State Court Administrative Office approved the step. King will continue to be paid. Details about the training, and how long it would last, were not disclosed.
King, who has been a judge since 2006, didn’t immediately return a phone message seeking comment. At the close of his Thursday hearings, accessible on YouTube, he made a heart shape with his hands. The judge’s work includes determining whether there’s enough evidence to send felony cases to trial at Wayne County Circuit Court.
Till said her daughter was sleepy during the Tuesday court visit because the family doesn’t have a permanent residence.
“And so, that particular night, we got in kind of late,” she told the Free Press, referring to Monday night. “And usually, when she goes to work, she’s up and planting trees or being active.”
The teen was seeing King’s court as part of a visit organized by The Greening of Detroit, an environmental group.
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Congolese military court hands down death sentence to leader of rebel coalition
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2024/08/05 11:21
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A military court in Congo on Thursday sentenced 25 people, including the leader of a rebel coalition, to death after a high-profile televised trial that started late last month.
Corneille Nangaa, leader of the Alliance Fleuve Congo, or AFC, was found guilty of war crimes, participation in an insurrection and treason. Naanga and 19 other defendants sentenced to death were absent from the trial as they are currently on the run.
“This nauseating judicial saga reinforces our struggle for democratic normality in Congo,” Nangaa told the Associated Press in a text message from an undisclosed location.
The AFC is a political-military movement launched by Nangaa in December with the aim of uniting armed groups, political parties and civil society against Congo’s government. One of its most renown members is the M23, an armed group accused of mass killings in eastern Congo’s decadeslong conflict.
Congo’s president Felix Tshisekedi, along with U.S. and U.N. experts, accuse neighboring Rwanda of giving military backing to M23. Rwanda denies the claim, but in February it effectively admitted that it has troops and missile systems in eastern Congo to safeguard its security, pointing to a buildup of Congolese forces near the border.
The court’s decision against Nangaa follows the announcement of a cease-fire between Congo and Rwanda last week following talks mediated by Angola. The cease-fire took effect on Sunday but prospects are slim with previous truces not lasting more than a few weeks and fighting having already resumed near the border with Uganda.
The death sentence against Nangaa might be a way to have more leverage in possible future negotiations with Rwanda or the armed groups themselves, Yvon Muya, a conflict studies researcher at Saint Paul University, said.
The decadeslong conflict in eastern Congo has produced one of the world’s worst humanitarian crises, with over 100 armed groups fighting in the region, most for land and control of mines with valuable minerals. Some are fighting to try to protect their communities.
Many groups are accused of carrying out mass killings, rapes and other human rights violations. The violence has displaced about 7 million people, including thousands living in temporary camps. Many others are beyond the reach of aid.
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