Profit at Ford Slides
Ford Motor Co reported revenue for the third quarter of $34.8 billion down by 0.9% from the third quarter of last year, but ahead of analyst’s estimate on Wall Street.
Net income for the quarter was $835 million, which was 34.3% down from the same quarter last year. Earnings per share were 21 cents, which was 10 cents lower than last year in the third quarter.
Mark Fields the CEO at Ford said the automaker introduced many new vehicles as well as invested heavily in new technologies and products that would deliver solid profitable growth starting in 2015.
Shares of Ford were up slightly in trading Friday before the bell but as soon as the opening bell came, they turned negative and fell to $13.75.
Ford’s international segments were weak.
Automotive revenue for the Detroit-based automaker was $32.8 billion, which was lower by 1.1% from the same period one year ago. Its operating margins in that segment were down from last year’s 7% to just 2.5%.
The company noted however that this and profit before taxes declined in the segment from over $2.18 billion to $687 million. This could be explained through higher costs of warranty including recalls with the most coming in North America, volumes that were lower in both South and North America along with adverse exchange effects in the balance sheet for the most part in South America.
Looking forward, Ford announced it maintained its prior guidance that includes plans to launch 23 new products in 2014.
The automaker said it continued to expect profits pre-tax to be approximately $6 billion, which excludes any special items on revenue that is expected to be over $139.3 billion, which would put it flat against revenue from 2013.
Forde said it expected its margin to end below that of last year which was 5.4% with is operating margin in North America on the lower said of the 8% to 9% range.
However, it expects improving results of year over year in Asia Pacific, Europe as well as its Ford Credit segment.
The U.S. economy has shown great strides in strengthening but Europe and Asia have struggled and cooled off respectively, which has affected international sales at Ford.
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