Financial writers, including me, have been stumbling over each other to tout Ford's (NYSE:F) successful turnaround story over the last year or so. Indeed, the company has been doing a great job increasing sales as well as the bottom line, which has boosted investor confidence. However, the company's latest trading update came as a disappointment to investors, who by now had their hopes strung perhaps a little too high. Certainly, the figures don't look as bright as Toyota's (NYSE:TM). Additionally, uncertainty surrounding the position of CEO Alan Mulally could increase the stock's volatility. What's in store for the iconic U.S. automaker?

Lowered guidance
On Wednesday, Ford posted its biggest one-day decline in over two years, dropping 6.3%, following a weak trading update largely related to its rollout of a record number of new vehicles in 2014. The automaker is now expecting a profit of between $7 billion and $8 billion in 2014, following a pre-tax profit of around $8.5 billion over fiscal 2013. Throughout 2014, Ford plans to introduce 23 new vehicles, which is more than twice the number released in 2013. According to management, these rollouts will put its mid-decade margins under pressure.

Still, the comparison may be a difficult one, as Ford called 2013 one of its best financial years in history. Over the full year, the company expects revenue growth of around 10%, a higher market share in most regions, as well as the highest North American pre-tax profit in over 10 years. However, the Blue Oval might miss its 10% operating margin target for the year due to a large recall of Escape SUVs which led to a warranty cost of between $250 million and $300 million.

And then there is the troublesome European market. Ford's relatively poor performance there stands in stark contrast to Toyota's European sales. In the latest figures from the region, Toyota saw registrations rise a very healthy 6.9%, which is certainly a lot better than Ford's 2.9% decline in November. Toyota's premium Lexus unit did especially well, with a massive 31% increase in registrations.

Other factors endangering Ford's mid-decade targets are weaker than expected market conditions in Europe and South America. The carmaker has already announced restructuring plans in Europe, and expects new products in Brazil and Argentina to boost the top line, but warned of currency devaluation in Argentina. Interestingly, some analysts believe that Ford wanted to release the bad news before Mulally's possible replacement takes over.

CEO switch
According to Buckingham Research Group's Joe Amaturo, the trading update could set the stage for Mulally's departure as CEO of Ford. This would be aimed at taking some of the sting off of Mark Fields, Mulally's likely replacement. It is no secret that Mulally has been in talks with Microsoft (NASDAQ:MSFT) about replacing CEO Steve Ballmer, who has been blamed for a lot of the software giant's lackluster performance in recent times.

Ballmer's exit was announced in August, and Mulally has for a while now been considered the most likely candidate for the job. Mulally became the head of Ford in 2006 after a long career at Boeing, and is regarded as a highly experienced and competent businessman. As far as releasing the bad news under the current leadership, leaving Fields with a clean slate, Amaturo believes that the release indicates Mulally's likely departure. Investors seem to consider this bad news for Ford, but Microsoft investors will probably be very pleased with new leadership.

The bottom line
Ford shares suffered their biggest drop in over two years, following a weak trading update and uncertainty concerning the future plans of Mulally. However, the lowered guidance is largely due to a massive product rollout scheduled for 2014, the benefits of which may only be apparent in later years. Perhaps the trading update was released under Mulally's leadership intentionally, with the goal of leaving his likely successor, Fields, with a clean slate? In any case, Mulally's switch to Microsoft seems to become ever more realistic.

Daniel James has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.