Boston, MA 12/23/2013 (wallstreetpr) – As always, investors want companies that turn profits repeatedly. Ford Motor Company (NYSE:F) has been such kind of a company. In the past few years, the company has not only turned around from a loss making entity to profit entity, it has also had attracting dividends for its shareholders.
Most everyone holding the stock today and even those who are eying Ford Motor Company (NYSE:F) would want this positive script to continue, if possible, forever. But is it possible?
Looking at Ford Motor Company (NYSE:F), it is obvious that Allan Mulally, the company’s CEO, has held lay solid ground for the company’s future. The company’s bright future can be seen through the famous ‘One Ford” plan. However, as much as the future looks promising for this company, it is obvious that some low profit season is going to be experienced in the next few quarters.
Launch of new products
Ford Motor Company (NYSE:F) has set its priority in 2014 to be the launch of a series of its new vehicle platforms. What happens when a company launches a new product is that it incurs a lot of cost which subsequently weigh on profits. And this is what is going to happen to Ford Motor in 2014.
The costs will come in the form of product advertisement, marketing and production expenditure. As a result, profits will most likely be hurt for the better part of next year. This explains why Ford Motor Company (NYSE:F)’s CFO Bob Shanks announced last week that profits next year will drop below the $8.5 billion expected this year.
To sell or to retain?
That Ford Motor Company (NYSE:F) is expecting profit drop in 2014 can worry some investors. But looking into the details, it is actually good news given that after the drop in profits, a big surge will be experienced starting 2015. It thus means that just when some investors are selling because of the predicted fall in profit, those who understand what’s playing out can seize the moment to buy the stock now.
