As reporters combed through Ford’s Q1 earnings filing after Thursday evening’s blockbuster report, which sent the automatker’s shares soaring more than 8% in after-hours trade, they stumbled upon an important nugget: The company disclosed that the DoJ has launched a criminal investigation into emissions certifications irregularities that the company self-reported back in February.
Before traders get carried away, Ford has caveated this by reiterating that the potential violations don’t involve ‘defeat devices’ like those used in some Volkswagen diesel engines to deliberately cheat American emissions testing.
Ford said the issue at the center of the probe is related to “road load estimations,” which means the company’s calculations of individual vehicle emissions may have been skewed.
Here’s more from the Ford’s filing:
Emissions Certification (as previously reported on page 23 of our 2018 Form 10-K Report). As previously reported, the Company has become aware of a potential concern involving its U.S. emissions certification process. This matter currently focuses on issues relating to road load estimations, including analytical modeling and coastdown testing. The potential concern does not involve the use of defeat devices (see page 10 of our 2018 Form 10-K Report for a definition of defeat devices). We voluntarily disclosed this matter to the U.S. Environmental Protection Agency and the California Air Resources Board on February 18, 2019 and February 21, 2019, respectively. Subsequently, the U.S. Department of Justice opened a criminal investigation into the matter. In addition, we have notified a number of other state and federal agencies. We are fully cooperating with all government agencies. Because this matter is still in the preliminary stages, we cannot predict the outcome, and we cannot provide assurance that it will not have a material adverse effect on us.
Though Ford warned that it couldn’t assure investors that the probe wouldn’t have a negative impact on its operations, the company’s shares traded 7% higher in premarket trading.
Last night, Ford reported Q1 adjusted earnings of 44 cents a share on $40.3 billion in sales. Both numbers surpassed Wall Street’s expectations, propelling the company’s shares – which have already strongly outperformed the broader market so far this year – even higher. On Thursday, the company’s shares broke above $10 for the first time since August. Still, the automaker’s shares remain well below their highs from 2011.
via ZeroHedge News http://bit.ly/2GHolHm Tyler Durden