Dearborn: Ford Motor Co reported a first-quarter profit that was less than analysts expected, selling fewer vehicles in North America as it worked to increase production of the redesigned F-150 pickup truck, and losing money in South America.
The number two US automaker on Tuesday also maintained its full-year forecast of pretax profit between $8.5 billion and $9.5 billion.
The company raised its forecast for North American operating margin to 8.5 percent to 9.5 percent from 8 percent to 9 percent as the F-150 launch goes better than expected, but Ford said business conditions were worsening in South America.
“The external environment in South America has deteriorated compared to where we were just a few months ago," Ford Chief Financial Officer Bob Shanks told reporters.
Instead of reporting a "substantial" improvement from last year`s $1.16 billion loss in South America, as it had forecast in January, Ford dropped "substantial" from its outlook.
Ford`s overall first-quarter net income fell 7 percent to $924 million, or 23 cents a share, from $989 million, or 24 cents a share, a year earlier. Analysts expected earnings of 26 cents a share, according to Thomson Reuters I/B/E/S.
Revenue fell 5.6 percent to $33.9 billion, matching expectations.
Ford said 2 cents of the 3-cent profit shortfall was due to a tax rate that was higher than analysts expected.
Shanks said the company`s operating profit margin of 6.7 percent in North America would have topped 10 percent, if two highly profitable models now being relaunched with new designs - the F-150 and Edge - had matched year-ago sales levels.
Ford`s North American profit would have increased more than $1 billion from its reported $1.34 billion operating profit if sales of the relaunched vehicles had been the same as last year, he said.
Ford shipped 40 percent, or about 60,000, fewer F-150 pickup trucks in the quarter than a year ago, and about 15,000, or more than 50 percent, fewer Edge vehicles than a year ago, Shanks said.
North American market share fell by six-tenths of a point to 6.7 percent due to the launches, but Shanks said that will rise through the rest of the year.
The loss in South America narrowed to $189 million from $510 million last year as it pushed through higher prices, but Shanks said the region`s economies were "clearly in recessionary conditions." Ford will keep cutting costs and matching production with the weaker demand as it rides out the downturns.
The loss in Europe narrowed to $185 million from $194 million, while profits in Asia Pacific dropped to $103 million from $291 million last year due to the cost of product launches.