DETROIT (AP) – Ford says it will take an $800 million charge in the fourth quarter because of exchange rate problems between the Venezuelan bolivar and the U.S. dollar.
The company says the charge will cut fourth-quarter net income by $700 million, after deferred tax benefits. But the automaker still expects a full-year pretax profit of $6 billion when it reports 2014 earnings Thursday.
In September, Ford cut its full-year pretax profit forecast to $6 billion. That’s down from $8.6 billion in 2013.
Ford says in a regulatory filing that the company can no longer exchange bolivars to dollars due to Venezuelan currency exchange controls. The company says the controls have limited auto parts availability and have cut into normal production. But Ford says it will continue operations there for the foreseeable future. The Dearborn, Michigan, automaker has had operations in Venezuela for 53 years.
The company’s filing says its financial results in the future won’t include its Venezuelan operations. Ford plans to record cash and recognize income from the country when it is paid for parts. Ford says it will work with Venezuelan government agencies “to ensure they understand our Venezuelan operations’ business needs and potential production opportunities.”