North American sales boost Ford’s profits

Automaker’s quarterly net income up 15% to $1.6B

New York TimesApril 24, 2013 

Millionth Mustang

Ford's Flat Rock Assembly Plant employees photograph the millionth Ford Mustang as it's driven off the assembly line in Flat Rock, Mich., Wednesday, April 17, 2013. A million Mustangs have rolled off the Flat Rock assembly since production moved there in 2004. The car was built at Ford's Rouge factory for four decades before moving to Flat Rock in 2004.

CARLOS OSORIO — AP

— Ford Motor Co. said Wednesday that its net income had improved 15 percent in the first quarter to $1.6 billion as record results in North America compensated for losses in Europe and South America.

Ford, the nation’s second-largest automaker, said its revenue had grown 10 percent in the quarter to $35.8 billion, compared with the year-ago period, and its market share continued to increase in the United States.

Despite unsettled economic conditions in international markets, the company reiterated forecasts that its full-year profits would at least match its performance in 2012.

“Our strong first-quarter results provide further proof that our One Ford plan continues to deliver,” said Alan R. Mulally, Ford’s chief executive.

Ford shares closed down 3 cents Wednesday at $13.33. The earnings results were better than analysts had expected, with Ford reporting a pretax profit of $2.1 billion, or 41 cents a share, exceeding forecasts of 37 cents a share, according to Thomson Reuters.

Ford said that strong sales in its core North American market had propelled the company to its 15th consecutive profitable quarter. The company’s sales in the United States rose 11 percent in the first three months of this year, compared with a 6 percent increase for the overall industry.

In North America, Ford posted a pretax profit of $2.4 billion, a 14 percent improvement over the same period a year ago. The company said it was the best quarterly performance since it began reporting the region as a separate business unit in 2000.

The company has steadily rebuilt its product lineup in recent years, bringing out new versions of mainstay vehicles like the Explorer SUV and expanding production of smaller, more fuel-efficient cars like the Focus.

But Ford, like most other major automakers, continued to struggle overseas in the first quarter.

The company reported a pretax loss of $462 million in Europe – about triple the $149 million it lost in the region in the first quarter of 2012.

Ford has said it expects to lose up to $2 billion this year in Europe, where weak economic conditions have driven new vehicle sales to their lowest level in decades.

The company is closing a major assembly plant in Belgium and accelerating other cost cuts in Europe. Ford said the “outlook for the business environment in Europe remains uncertain.”

In South America, Ford reported a pretax loss $218 million, after earning a profit of $54 million in the same period last year. The company said that currency issues in Venezuela and Argentina had depressed its results but that it still expected to break even in the region for the entire year.

Results in Asia, where Ford is investing heavily in new factories and products, improved slightly. The company said it had earned a pretax profit of $6 million in the region compared with a $95 million loss a year ago.

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