Record North America Profit Boosts Ford Results
Ford Motor Co reported second-quarter operating earnings that beat expectations thanks to record profit in North America, boosting its shares more than 1 percent in early trading, reported Reuters.
Pretax profit in North America of $2.44 billion and the company's first profit in Europe in three years offset weaker-than-expected results in Asia Pacific and South America.
Chief Financial Officer Bob Shanks said lower costs boosted the company's performance in North America. Nine analysts surveyed by Reuters expected a pretax profit of $2.04 billion.
Costs in the second half of the year are expected to rise as the company introduces more products, including the most important vehicle in its portfolio, the F-150 pickup truck.
Ford's new chief executive, Mark Fields, said during a conference call he was "confident" the F-150 would launch on time without the quality problems sometimes associated with new-vehicle launches.
A limited number of new F-150 trucks, which will be about 700 pounds lighter than the current version, will be available later this year.
The company's operating margin in North America improved to 11.6 percent, from 10.6 percent a year ago.
Ford affirmed its full-year guidance for a pretax profit of between $7 billion and $8 billion. Last year, its pretax profit was $8.6 billion.
The company's outlook for South America was downgraded to a greater loss than previously expected. It now anticipates breaking even or taking a loss in the second half of the year.
For the quarter, South America showed a loss of $295 million.
The Asia-Pacific region's operating profit of $159 million was less than the $260 million expected by analysts. Shanks said most of that profit came from China, but didn't give a breakdown.
Ford's market share in China, the world's biggest car market, rose to a record 4.6 percent.
Profit in Europe "clearly shows that the transformation plan is working," said Shanks of restructuring efforts that included closing a Belgian plant.
Ford maintained its outlook for full-year profit in Europe in 2015.
One-time items in the quarter included an accounting charge of $329 million because of poor cash flow in Russia, where Ford has a joint venture with carmaker Sollers.
The quarter was Ford's last one under the leadership of Alan Mulally, who retired as chief executive and was credited with Ford's turnaround in his tenure that began in 2006.
Excluding one-time items, Ford earned a profit of $2.6 billion, or 40 cents per share, which topped the 36-cent-per-share forecast by analysts surveyed by Thomson Reuters I/B/E/S.
Net income in the quarter was $1.3 billion, or 32 cents per share, up from $1.23 billion, or 30 cents, a year earlier. Revenue of $37.4 billion compared with $37.9 billion a year ago.
Ford shares were up 1.5 percent at $18.06 in morning trading, after earlier jumping nearly 2 percent.
More Industry

Auto Prices Ride May Moderation
Flat ATPs and asking prices clocked in below long-term averages for the month, though some segments saw significant price gains, reported Cox Automotive.
Read More →
Auto Retail Families Get Out While the Getting’s Good
Kerrigan Advisors’ first-quarter Blue Sky Report shows a sharp uptick in buy-sell deals as more retailers take advantage of handsome values while seeking to escape market risk.
Read More →
Holman Opens New Lexus Dealership
Located in the heart of Clark County, Lexus of Vancouver features a multi-level showroom, more than 30 service bays, an indoor drive for drop-off and pick-up and a fleet of courtesy vehicles.
Read More →
Ownership Priorities are Shifting
A new survey shows that in the U.S. vehicle quality for generation Z is largely defined by advanced safety features, intuitive technology and premium sound systems.
Read More →
Pump Price Jump Calculated
ISeeCars.com examined fuel costs for different power trains, finding which ones have experienced the biggest hits since the war in Iran commenced.
Read More →
Black Book: Weekly Market Update
Wholesale values fell last week despite the spring season still being in the traditional full-gear mode, analysts said.
Read More →
Arkansas Auto Group Acquires First Indiana Rooftop
Performance Brokerage Services represented both the buyer and seller in the sale of Carver Toyota of Columbus by Carlock Automotive Group.
Read More →
Stellantis to Dive Into U.S. Lending
The multinational maker of Chrysler, Dodge, Jeep, Ram and multiple other brands received conditional approvals for a Utah-based industrial bank.
Read More →
New-Vehicle Prices Rise
With April sales down, higher prices on in-demand large vehicles helped inflate the overall ATP, though increases were under long-term averages, Cox Automotive reported.
Read More →
Black Book: Weekly Market Update
Last week in the wholesale automotive market proved to be a mixed bag, analysts reported.
Read More →