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Ford Q4 2018 earnings

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Ford‘s reorganization plans showed up in its fourth-quarter earnings Wednesday as pension and layoff costs eroded the company’s profit and caused it to miss earnings estimates — despite posting stronger-than-expected sales.

The Detroit automaker has been struggling overseas, and that was apparent in the fourth quarter. While Ford grew its revenue in North America by $1.7 billion, it fell in every other region across the globe. It lost market share in every major market in South America except Peru. Unfavorable exchange rates and a drop in sales volume also hurt Ford’s bottom line, especially in Europe and Asia.

Here’s how the company did compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

— Adjusted earnings per share of 30 cents vs. a forecast of 32 cents per share

— Automotive segment revenue: $38.7 billion vs. a forecast of $36.88 billion

Ford took a $1.18 billion charge for “special items” that were excluded from its adjusted earnings. The charges stem mostly from pension and layoff costs. On an unadjusted basis, Ford lost $116 million, or 3 cents a share, during the fourth quarter. It generated a profit of $2.52 billion, or 63 cents per share, a year earlier.

The company’s total revenue was $41.8 billion during the quarter, slightly higher than its $41.3 billion in revenue during the same quarter last year.

“While 2018 was a challenging year, we put in place key building blocks to build a more resilient and competitive business model that can thrive no matter the economic environment,” Ford Chief Financial Officer Bob Shanks said in a statement.

Despite the losses, Ford expects to be able to fully fund its business and capital needs in 2019, while keeping cash and liquidity at or above target levels, Shanks said.

On an adjusted basis, the company earned 30 cents a share, which missed analyst expectations of 32 cents per share, according to analysts surveyed by Refinitiv. It was also less than the 39 cents a share the company reported in the same quarter of 2017.

Ford’s shares have been under pressure all year, tumbling by about 22 percent over the last 12 month, closing at $8.34 a share Wednesday.

The automaker is undergoing an $11 billion restructuring plan that has so far involved trimming back international operations, making investments in new mobility technologies, and realigning its portfolio around more profitable vehicles.

That strategy includes doubling down on segments where Ford has historically been strongest — trucks, utilities, and muscle cars. The automaker unveiled a refreshed version of its best-selling Explorer sport utility vehicle at the Detroit auto show and is also broadening its Mustang lineup.

Ford also said it is partnering with German automaker Volkswagen on a number of initiatives, shortly after announcing job cuts across its European operations.

The company is holding a conference call with CEO Jim Hackett and other executives at 5:30 p.m. ET to discuss the results.

This story is breaking news. Please check back for updates.

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Deutsche Bank is sound despite recent setbacks, German minister says

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The German government believes that the embattled lender, Deustche Bank, is in a sound and healthy state despite recent setbacks, the country’s economy minister told CNBC Wednesday.

Deutsche Bank has been struggling for about a decade, plagued by fines, several failed plans to reduce costs and losses in market share. On Wednesday, the bank’s stock price once again came under pressure due to reports that the U.S. Federal Reserve is investigating the German bank’s potential involvement in a money laundering scheme.

Peter Altmaier, minister for economic affairs and energy, told CNBC that the bank has suffered some setbacks but it is still sound.

Deutsche Bank … suffered some setbacks in the past, but it is basically sound and it can recover and so the question is what are the details of such strategy. And as we discussed with the CEO and the board and all the people concerned, I trust in Deutsche Bank and I will lend my political support to Deutsche Bank,” Altmaier said at the World Economic Forum in Davos.

Given the continuing problems, there have been growing reports of a potential merger between the German lender and its national rival, Commerzbank. Speaking to CNBC, the economy minister did not want to comment on such a possibility, but said that the government has a keen interest in seeing a solid Deutsche Bank.

“(A merger) is something that has to be considered first of all by the banks and the companies concerned. We are a market economy and we respect the decisions that are taken by banks or companies whatsoever,” he said.

“We have, however, as the German state and government, a warm interest in a good and strong position of our national champions, and European champions…I am fully convinced that a county like Germany has a warm interest in seeing a good and stable and well-performing bank.”

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Venezuela’s Nicolas Maduro gives American diplomats 72 hours to leave

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Venezuelan President Nicolas Maduro said on Wednesday he was breaking diplomatic relations with the United States, after the Trump administration recognized opposition leader Juan Guaido as the South American country’s interim president.

Speaking to supporters outside the Miraflores presidential palace in Caracas, socialist leader Maduro said he would give U.S. diplomatic personnel 72 hours to leave Venezuela, which is suffering from a hyperinflationary economic collapse.

Earlier Wednesday, the Trump administration ratcheted up pressure on Maduro on Wednesday, announcing U.S. recognition of Guaido as interim president and signaling potential new sanctions against its vital oil sector.

With street protests against Maduro underway across Venezuela, Trump said the United States recognized Guaido, head of the opposition-controlled Congress, as the country’s leader and called socialist Maduro’s government “illegitimate.”

“I will continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy,” Trump said in a statement, encouraging other governments in the Western Hemisphere to also recognize Guaido.

The administration had been waiting to issue its announcement after Guaido had been sworn in as the country’s temporary president on Wednesday, people familiar with the matter told Reuters.

Venezuelan opposition sympathizers had been urging Guaido to assume the presidency since Maduro was inaugurated to a second term on Jan. 10 following a widely boycotted election last year that the United States and many other foreign governments described as a fraudulent.

Guaido, a newcomer on the national scene who was elected to head Congress on Jan. 5, had said earlier he was willing to replace Maduro if he had the support of the military, with the aim of then calling for free elections.

U.S. officials in recent days had stated openly that Maduro no longer had a legitimate claim on power.

This story is developing. Please check back for updates.

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