Ford expects lower Q2 profit on growing losses

CNBC (Detroit) - Ford Motor Co. has already warned that its second-quarter profit will fall below last year's $2.4 billion because of trouble outside North America. On Wednesday, investors will see the extent of the damage — and find out if Ford expects the bad news to continue in the second half.

The Dearborn, Mich.-based automaker said in a government filing last month that conditions in Europe had "deteriorated significantly" and that it expected to lose $500 million to $600 million outside North America in the second quarter. When the year started, that was Ford's estimate of losses in Europe for all of 2012.

Ford is hurting from low sales and excess production capacity in Europe, where consumer confidence has been battered by the economic crisis. Morgan Stanley analyst Adam Jonas said Ford is currently using just 63 percent of its European factory capacity. The company needs to cut that capacity, or risk paying for plants that aren't producing anything, he said.

Jonas recently cut his second-quarter earnings forecast by 10 cents to 23 cents per share,

Ford has problems beyond Europe. In South America, Ford has older, uncompetitive products and has also been hurt by tariffs in Argentina and Brazil. Ford is also losing money in Asia, where it's in the middle of an ambitious and costly expansion.

The company still expects "strong" results in North America, its most important region. U.S. sales were up 7 percent in the first half of the year, and Ford is making more money per vehicle thanks to fewer discounts and more enticing, option-filled products.