Ford profit beats estimates; maintains 2017 profit outlook

Ford first quarter profit beats estimates, reiterates 2017 profit outlook
Ford's earnings up 4 percent in early 2017 as profits dip
Author

30 April, 2017

Ford earned US39c per share, which compares favourably with the 36 cents per share Wall Street analysts, on average, expected it to earn.

Ford Motor Company is announcing an earnings increase of 4 percent for the first quarter of 2017, though both net income and pre-tax profit results fell compared to early 2016.

Ford's costs during the first quarter were hurt by two recalls in North America, one to replace potentially faulty side door latches and the other for under-hood fire risks.

"This quarter was an investment in Ford's future", Ford President and CEO Mark Fields said.

Ford Motor Co.'s first-quarter profit fell 35% from a year earlier amid higher costs and weaker USA sales, sending the stock down 1.7% in early afternoon trading. It also flagged "higher cost due to warranty, investments in new products and emerging opportunities for future growth, and rising commodity costs".

Ford delivered 1.7-million vehicles globally in the first quarter, while Daimler delivered 754,300, of which 568,100 were Mercedes-Benz cars.

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North America produced the most profits for the automaker even though profits fell in the region to $2 billion in comparison to $3.1 billion the prior year. Ford said it had 14.1% of the North American market, down 0.5 points from past year. Ford said Thursday it expects industrywide sales to decrease a little this year and in 2018. Lincoln sales rose 9 percent to just over 27,000 in the U.S.

Automotive revenue for the quarter rose to $36.5 billion from $35.3 billion a year earlier. In the year-ago quarter, the cable and internet service provider reported adjusted earnings of 43 cents per share, GAAP earnings of 42 cents per share and $18.8 billion in revenue.

During the first quarter a year ago, the Dearborn, Michigan auto maker earned a profit of $US2.4 billion, its best ever.

According to the company, lower profit was driven by higher cost, lower volume and unfavorable exchange. Ford said the average price customers paid for a vehicle was up $1,971 in the U.S.in the first quarter, compared with an industry average increase of $506. Ford's Super Duty pickups came out last fall, for example, so the company will be able to command less for it as this fall rolls around.

But the contrasts between Ford, which released its Q1 earnings report Thursday, and Daimler AG, which released its Q1 report Wednesday, illuminate the differences between a commodity automaker and one that deals primarily in luxury vehicles.


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