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Ford cuts 2024 earnings guidance due to warranty costs and slow pace of cost cutting
Law Promo News |
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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Justices asked to hear dog toy dispute. Will they bite?
Law Promo News |
2022/11/15 14:21
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The company that makes Jack Daniel’s is howling mad over a squeaking dog toy that parodies the whiskey’s signature bottle. Now, the liquor company is barking at the door of the Supreme Court.
Jack Daniel’s has asked the justices to hear its case against the manufacturer of the plastic Bad Spaniels toy. The high court could say as soon as Monday whether the justices will agree. A number of major companies from the makers of Campbell Soup to outdoor brand Patagonia and jeans maker Levi Strauss have urged the justices to take what they say is an important case for trademark law.
The toy that has Jack Daniel’s so doggone mad mimics the square shape of its whisky bottle as well as its black-and-white label and amber-colored liquor while adding what it calls “poop humor.” While the original bottle has the words “Old No. 7 brand” and “Tennessee Sour Mash Whiskey,” the parody proclaims: “The Old No. 2 on Your Tennessee Carpet.” Instead of the original’s note that it is 40% alcohol by volume, the parody says it’s “43% Poo by Vol.” and “100% Smelly.”
The toy retails for about $13 to $20 and the packaging notes in small font: “This product is not affiliated with Jack Daniel Distillery.”
The toy’s maker says Jack Daniel’s can’t take a joke. “It is ironic that America’s leading distiller of whiskey both lacks a sense of humor and does not recognize when it — and everyone else — has had enough,” lawyers for Arizona-based VIP Products wrote the high court. They told the justices that Jack Daniel’s has “waged war” against the company for “having the temerity to produce a pun-filled parody” of its bottle.
But Jack Daniel’s lead attorney, Lisa Blatt, made no bones about the company’s position in her filing.
“To be sure, everyone likes a good joke. But VIP’s profit-motivated ‘joke’ confuses consumers by taking advantage of Jack Daniel’s hard-earned goodwill,” she wrote for the Louisville, Kentucky-based Brown-Forman Corp., Jack Daniel’s parent company.
Blatt wrote that a lower court decision provides “near-blanket protection” to humorous trademark infringement. And she said it has “broad and dangerous consequences,” pointing to children who were hospitalized after eating marijuana-infused products that mimicked candy packaging.
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Wisconsin Supreme Court says COVID records can be released
Law Promo News |
2022/06/07 15:46
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A divided Wisconsin Supreme Court on Tuesday said the state health department can release data on coronavirus outbreak cases, information sought two years ago near the beginning of the pandemic.
The court ruled 4-3 against Wisconsin Manufacturers & Commerce, the state’s largest business lobbying group, which had wanted to block release of the records requested in June 2020 by the Milwaukee Journal Sentinel and other news outlets.
The state health department in the early months of the pandemic in 2020 had planned to release the names of more than 1,000 businesses with more than 25 employees where at least two workers have tested positive for COVID-19.
Wisconsin Manufacturers & Commerce, along with the Muskego Area Chamber of Commerce and the New Berlin Chamber of Commerce, sued to block the release of the records, saying it would “irreparably harm” the reputations of their members. It argued that the information being sought is derived from diagnostic test results and the records of contact tracers, and that such information constitutes private medical records that can’t be released without the consent of each individual.
Attorneys for the state argued that the information contained aggregate numbers only, not personal information, and could be released. A Waukesha County circuit judge sided with the business group and blocked release of the records. A state appeals court in 2021 reversed the lower court’s ruling and ordered the case dismissed, saying WMC failed to show a justifiable reason for concealing the records.
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German federal court mulls bid to remove antisemitic relic
Law Promo News |
2022/05/30 09:36
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A German federal court on Monday mulled a Jewish man’s bid to force the removal of a 700-year-old antisemitic statue from a church where Martin Luther once preached, and said it will deliver its verdict in the long-running dispute next month.
The “Judensau,” or “Jew pig,” sculpture on the Town Church in Wittenberg is one of more than 20 such relics from the Middle Ages that still adorn churches across Germany and elsewhere in Europe.
The case went to the Federal Court of Justice after lower courts ruled in 2019 and 2020 against plaintiff Michael Duellmann. He had argued that the sculpture was “a defamation of and insult to the Jewish people” that has “a terrible effect up to this day,” and has suggested moving it the nearby Luther House museum.
Placed on the church about four meters (13 feet) above ground level, the sculpture depicts people identifiable as Jews suckling the teats of a sow while a rabbi lifts the animal’s tail. In 1570, after the Protestant Reformation, an inscription referring to an anti-Jewish tract by Luther was added.
In 1988, a memorial was set into the ground below, referring to the persecution of Jews and the 6 million people who died during the Holocaust. In addition, a sign gives information about the sculpture in German and English.
In 2020, an appeals court in Naumburg ruled that “in its current context” the sculpture is not of “slanderous character” and didn’t violate the plaintiff’s rights. It said that, with the addition of the memorial and information sign, the statue was now “part of an ensemble which speaks for another objective” on the part of the parish.
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Naturopathic doctor sentenced for selling misbranded drugs
Law Promo News |
2022/03/24 16:13
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A former Port Angeles naturopathic physician was sentenced to eight months in prison and one year supervised release after being found guilty of selling products he claimed could prevent numerous serious diseases, including COVID-19.
Richard Marschall, 69, was convicted in 2021, after a four-day trial, of introducing misbranded drugs into interstate commerce, his third conviction, according to the U.S. Attorney’s office. The jury found that his marketing was false or misleading and because his products were not listed with the FDA.
At the sentencing hearing Monday, U.S. District Judge Benjamin H. Settle said, “It is extremely dangerous during the COVID epidemic for people to be engaged in conduct that would lead other people to defer and wait to receive medical care.”
Marschall was convicted previously and sentenced in federal court for distributing misbranded drugs, both in 2011 and again in 2017. |
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Supreme Court won't review Arizona foster-care lawsuit
Law Promo News |
2020/03/24 10:24
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The U.S. Supreme Court has declined to review whether a 2015 lawsuit alleging gross failures in the foster-care system should be treated as a class-action matter.
The high court decision means the case will proceed to trial as a class-action lawsuit, the Arizona Republic reported.
A trial date has not yet been scheduled before U.S. District Court Judge Roslyn Silver. Any changes to the system resulting for the lawsuit will apply to all children in Arizona foster care, as well as those in the future.
Attorneys for the Arizona Department of Child Safety and the state's Medicare provider argue the lawsuit conflates problems that individual children have encountered with systemwide failures.
New York-based nonprofit Children's Rights has brought similar lawsuits in other states, arguing the problems are systemic and can only be solved with judicial intervention.
Silver's decision to classify the matter as a class action was upheld by the 9th U.S. Circuit Court of Appeals.
The Department of Child Safety has argued that it has made substantial improvements, citing a 23% decrease of children in state custody and to a higher rate of children leaving the system, either because the children were returned to their parents or were adopted. |
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Court rules Rams lawsuit can be heard in St. Louis courtroom
Law Promo News |
2019/08/23 14:37
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The Missouri Supreme Court has ruled that a lawsuit filed over the Rams' departure from St. Louis will be heard in a St. Louis courtroom, a defeat for the NFL team's owner who sought to send the case to arbitration.
The court issued its ruling Tuesday in a lawsuit filed by St. Louis city and county and the St. Louis Regional Convention and Sports Complex Authority, which owns the domed stadium where the Rams formerly played. It named Rams owner Stan Kroenke, who moved the team to Los Angeles for the 2016 season, the NFL and league owners.
It wasn't immediately clear if an appeal was planned. Messages left Wednesday with the Rams, Kroenke's attorney and the NFL were not immediately returned
The lawsuit alleged that the Rams' departure violated a 1984 league guideline that was established after the Raiders moved from Oakland to Los Angeles. The league, the Rams and Kroenke have argued that the disagreements should be settled behind closed doors in arbitration.
The suit seeks financial damages, but a win for the city, county and dome authority would not return the team to St. Louis. |
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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