What's happening

Shares of Ford Motor Company (NYSE:F) opened sharply lower on Wednesday, after the company reported earnings that fell short of expectations and gave weak guidance for the year ahead.

As of 1 p.m. EST, Ford's shares were trading down about 9.4% from Tuesday's closing price.

So what

Ford's fourth quarter wasn't a good one. Wholesale shipments fell 8% as the company carried out a slew of product-line changes, and pricing in some markets slipped as newer models from rivals took center stage. Even with an ongoing cost-cutting initiative, Ford's fourth-quarter adjusted operating profit fell 67% to just $485 million.

An orange 2020 Ford Escape, a sleek compact crossover SUV

Ford worked to ramp up production of the all-new 2020 Escape in the fourth quarter. Image source: Ford Motor Company.

Ford's full-year adjusted operating profit was $6.4 billion, down 8.6% from 2018.

Making matters worse for auto investors, Ford doesn't think things are going to improve in 2020. While free cash flow might improve a bit, on lower capital expenditures, Ford thinks its operating income is likely to slip further from 2019's disappointing result.

Now what

CEO Jim Hackett has been working to transform Ford since he took the top job in May 2017. But Ford's sales and profits have fallen steadily since his arrival, while his ongoing "redesign" has yet to bear fruit. If that trend doesn't change soon, Ford may find itself searching -- again -- for new leadership.

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