Ford profit tops forecast despite European drag
BY DEE-ANN DURBIN Associated Press
Wednesday, October 31, 2012
10/31/12 at 7:10 AM
DEARBORN, Mich. - Europe may have lost its appetite for new cars, but buyers in America and China propelled Ford to a better-than-expected profit in the third quarter.
Ford Motor Co. earned $1.63 billion, down only slightly from a year earlier, despite lower worldwide sales and bigger European losses.
Ford said Tuesday its per-share net income was unchanged at 41 cents. Excluding one-time items, like severance payouts, Ford earned 40 cents per share, beating Wall Street's forecast of 30 cents, according to FactSet.
Ford reported a $2.3 billion pretax profit in North America, its best performance since the company began reporting separate North American results 12 years ago. The region has been profitable for three years now, after a grueling restructuring that saw thousands of job cuts, plant closures and the accelerated development of new products like the Focus sedan. That restructuring is now Ford's blueprint for Europe, which is expected to drag down results this year and next.
"We know what it takes to have a healthy business," Chief Financial Officer Bob Shanks said.
Ford's revenue fell 3 percent to $32.1 billion as vehicle sales dropped worldwide, but the company still exceeded Wall Street's revenue forecast. That was due to North America, where revenue jumped 8 percent to $19.5 billion, helped by higher pricing and increased sales of more profitable trucks and SUVs like the Ford Explorer.
It was the third quarter in a row that the company has made more than $2 billion in North America and has reported an operating margin of 10 percent or more. Ford's North American operating margin was 12 percent in the third quarter.
"To me the story isn't just the results but the consistency of the results," Shanks said.
Shanks said the 12 percent rate likely won't be repeated in the fourth quarter, when automakers typically spend more on holiday ads.
Original Print Headline: Ford reports profits above forecast
A row of 2013 Ford Motor Co. Explorer and Edge vehicles sit on the lot at an auto dealership in Moline, Ill. Ford posted a better-than-expected profit in the third quarter. DANIEL ACKER / Bloomberg