Ford’s Quarterly Earnings Fall, but Still Top Estimates
Ford Motorsreported a fall in quarterly profit on weakness outside North America but still beat analyst expectations.
The automaker turned in a first-quarter profit excluding one-time items of 39 cents a share on sales of $32.4 billion, compared with 47 cents a share and a topline of $33.1 billion a year ago.
Wall Street analysts polled by Reuters projected that Ford would report a earnings of 35 cents a share on sales of $31.26 billion.
Ford attributed the lower quarterly profit to losses in Europe and China.
Several analysts said Ford's shares should rise slightly on Friday as the company had signaled to investors that Europe and China would be weak.
Ford shares , however, dropped about 2 percent on Friday.
Joseph Spak, analyst with RBC Capital Markets, said that Ford's loss in Europe "wasn't as bad as feared" but losses in China were greater than expected.
Including items, the second-largest U.S. automaker reported net income of $1.4 billion or 35 cents per share, down from the $2.6 billion net income it reported a year earlier.
The company recorded $255 million in special charges, largely due to buyouts of workers represented by the United Auto Workers union.
In Europe, Ford reported a pretax loss of $149 million, hurt by dwindling auto demand as many countries in Europe experienced recession-like conditions.
Ford also reported a loss in its operations in Asia and Africa, as well as lower profits in South America.
Ford depended on its home market for strength. North American pretax earnings were $2.1 billion, up $289 million from a year ago. That quarterly profit was the best since at least 2000, when the company began breaking out regional results.
As China growth has decreased and European markets are weak, the company has said it is relying on North America to boost earnings this year.
Ford also announced a plan to offer lump-sum pension buyouts to salaried retirees and former employees who are vested in its pension plan, starting in the third quarter.
The buyout program, which Ford described as unprecedented in its magnitude, will take a year and help the company lower its pension obligations, which credit rating agencies typically see as debt.
In the first quarter, Ford recorded $255 million in special charges, largely due to buyouts of workers represented by the United Auto Workers union. About 1,700 of Ford's 41,000 UAW-represented workers took the buyout package.