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Ford Gives Disappointing Outlook Says Turnaround To Take Years

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DETROIT – Ford Motor Co (F.N) on Tuesday estimated financial results for 2017 and 2018 that fell short of investor expectations, in a downbeat forecast that contrasted with a more positive outlook from rival automaker General Motors Co (GM.N).

Ford Chief Financial Officer Bob Shanks told analysts at an investor conference in Detroit that higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Cost-cutting actions are under way and will have the biggest impact “in 2020 and later,” Shanks said.

“We are not satisfied by our performance,” he said. “We are excited about our future.”

Ford’s president of global markets, Jim Farley, said the company’s business structure was “out of sync with our revenue,” and vowed to cut costs by sharply reducing the variants of high-volume Ford models and slashing marketing costs by $200 million a year.

Farley hinted at possible significant changes in the structure of Ford’s money-losing South American business.

”We are exploring every option you can imagine,” Farley told analysts and investors at a conference on the sidelines of the Detroit auto show.

To boost revenue, Farley said Ford would decrease its passenger-car models and develop more trucks and sport utility vehicles aiming at profitable niches such as rugged off-road models.

Ford shares dropped more than 2 percent in extended trading after the release of the forecast, but later recovered most of the losses. Ford said it would pay shareholders an extra dividend of $500 million, or 13 cents a share, for the first quarter.

Differing outlooks for 2018 from GM and Ford highlighted how the two largest U.S. automakers have been on diverging roads for the past year.

GM Chief Executive Mary Barra has led a dramatic overhaul of the No. 1 U.S. automaker, selling its unprofitable European operations, exiting troubled Asian markets and giving the green light to investments in self-driving vehicles and an expanded portfolio of electric vehicles.

GM projected 2018 results in line with the $6.00 to $6.50 a share adjusted earnings forecast for 2017, and promised higher profit in 2019. GM shares closed up slightly on Tuesday, after rising about 2 percent earlier in the day. GM shares are up 18 percent from a year ago.

Ford shares are up only about 4 percent from a year ago. In May, Ford’s board ousted Chief Executive Mark Fields and named Jim Hackett, who was known as a turnaround expert and had been leading Ford’s unit developing self-driving vehicles, to replace him. Hackett has promised to slash Ford’s product development costs by $14 billion and has launched reviews of the vehicle lineup.

Ford’s forecast reinforces Hackett’s warning to investors last fall that the cost-cutting and product strategy changes could take time.

For full-year 2017, Ford said adjusted earnings would be $1.78 per share, below analysts’ estimate of $1.83, according to Thomson Reuters I/B/E/S. For 2018, Ford expects adjusted earnings of $1.45 to $1.70 per share. Analysts on average expected earnings of $1.62.

In a nod to the importance investors are placing on alternatives to traditional auto manufacturing, Ford said it would start reporting separately the results of its investments in “mobility” businesses, such as self-driving delivery vehicles and ride services, and previewed a loss for those operations of $300 million for 2017.

Shanks said Ford’s mobility services business is a separate legal entity and reporting results gives the automaker “options down the road.” Some analysts have advocated that Ford create a separate class of shares to allow investors to put money into a technology-focused growth business.

Ford’s highly profitable F-series large pickup franchise will face aggressive challenges from GM and Fiat Chrysler Automobiles NV (FCHA.MI) (FCAU.N), as those rivals crank up their own respective production of new generations of large pickups. GM’s new Chevrolet Silverado and Fiat Chrysler’s 2019 Ram are both designed to chop at the F-series’ lead as the best-selling vehicle line in the United States.

Reporting by Joseph White; Additional reporting by Ankur Banerjee in Bengaluru and Nick Carey in Detroit;

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Rarest White Diamond Ever To Be Sold In London

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LONDON – A flawless diamond, the size of a large strawberry, is expected to fetch a world record price when it comes to market at Sotheby’s in London this month.

Weighing just over 102 carats, the round, brilliant white stone is smaller than a 118-carat oval diamond sold in Hong Kong in 2013, which currently holds the record price per carat.

But Sotheby‘s, which also handled that Hong Kong sale, expects the smaller stone’s rarity and high quality will see it attract an even higher price.

Slideshow (5 Images)

“That (stone sold in Hong Kong) fetched $260,000 a carat, currently the world record for any colorless diamond. This one being a round brilliant cut – the asking price will be north of that,” Patti Wong, chairman of Sotheby’s Diamonds told Reuters.

The diamond is the only stone over 100 carats to have been given the highest grades in every criteria by the Gemological Institute of America, which judges a precious stone’s quality, Sotheby’s said.

It has not disclosed the asking price for the stone, which will be sold in a private sale.

(This story corrects weight of other diamond to 118, not 163, carats in second paragraph and specifies throughout this is private sale, not auction.)

Writing by Mark Hanrahan in London;

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Rarest White Diamond Ever To Be Auctioned In London

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LONDON – A flawless diamond, the size of a large strawberry, is expected to fetch a world record price when it goes on sale at Sotheby’s in London this month.

Weighing just over 102 carats, the round, brilliant white stone is smaller than a 163-carat oval diamond sold in Hong Kong in 2013, which currently holds the record price per carat.

But Sotheby‘s, which also handled that Hong Kong sale, expects the smaller stone’s rarity and high quality will see it attract an even higher price.

Slideshow (5 Images)

“That (stone sold in Hong Kong) fetched $260,000 a carat, currently the world record for any colorless diamond. This one being a round brilliant cut – the asking price will be north of that,” Patti Wong, chairman of Sotheby’s Diamonds told Reuters.

The diamond is the only stone over 100 carats to have been given the highest grades in every criteria by the Gemological Institute of America, which judges a precious stone’s quality, Sotheby’s said.

It has not disclosed the asking price for the stone, which will be sold in a private sale.

Writing by Mark Hanrahan in London;

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Israeli Archaeologists Unearth 1800-year-old Mosaic

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CAESAREA, Israel – A 1,800-year-old mosaic of toga-clad men dating back to the Roman era has been unearthed in Israel, archaeologists said on Thursday.

The mosaic was discovered during the excavation of a building from the Byzantine period – some 300 years younger than the mosaic it was on top of – in the coastal city of Caesarea.

“The surprise was actually that we found two beautiful monuments from the glorious days of Caesarea,” Peter Gendelman, co-director of excavation for the Israel Antiquities Authority, told Reuters of the building and mosaic.

Caesarea was a vibrant Roman metropolis built in honor of Emperor Augustus Caesar by King Herod, who ruled Judea from 37 BC until his death in 4 BC.

Slideshow (5 Images)

The excavated portion of the mosaic, which the antiquities authority said was 3.5 meters by 8 meters in size, depicts three toga-clad men, as well as geometric patterns and an inscription in Greek, which is damaged.

If the mosaic came from a mansion, the figures could have been the owners, or if it was a public building, they may have been the mosaic’s donors or members of the city council, Gendelman said.

The mosaic was of a high artistic standard, with about 12,000 stones per square meter, the antiquities authority said.

Israel is undertaking the largest conservation and reconstruction project in the country in the Caesarea National Park, the antiquities team said. The project aims to reconstruct a Crusaders-era bridge.

Reporting by Rami Amichai; Writing by Mark Hanrahan in London;

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