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Ford Tops Expectations with Higher Revenues and Cost Cuts

| October 26, 2017


Ford topped analyst expectations, fueled by cost cuts and strong sales in North America.

Overall costs were lower do to planning and the fact that last year during the quarter Ford suffered a recall of its vehicles.

The impact then was huge: they had to recall almost 2.4 million.

As for the financial performance this quarter:

  • Adjusted EPS: 43 cents vs. 32 cents expected by analysts surveyed by Thomson Reuters.
  • Revenue: $36.5 billion vs. $32.8 billion expected in the Thomson Reuters survey.

“Clearly we have a lot of work ahead of us but this was a solid quarter,” said Ford CEO Jim Hackett on a conference call with investors.”

Solid performance in North America and a record pre-tax profits in Asia accelerated  automotive profits, Ford said.

In the U.S., the company’s popular F-Series truck lineup had its best third quarter in more than a decade and F-Series sales were up 14 percent in the quarter.

Overall, average transaction prices rose more than twice the industry average in the U.S., and incentives decreased.

Pre-tax profits for North America were 1.7 billion.

Results from Ford’s international businesses were mixed.

Ford’s Asia-Pacific business pulled in pre-tax profits of $289 million. But the company lost $86 million in Europe, which it attributed in part to the effects of Brexit, and the launch of the Fiesta. It also lost $158 million in South America and $60 million in the Middle East and Africa.

On a per share basis, net earnings rose to 39 cents, a 15 cent increase over the same quarter last year.

On an adjusted basis, the company reported third-quarter earnings of 43 cents a share, which outpaced analyst expectations of 32 cents. Earnings per share in the same quarter last year were 26 cents.

Ford reported $36.5 billion in revenue, beating analyst expectations of $32.8 billion.

Net income was $1.6 billion, compared with $1 billion in the same quarter of 2016.

Adjusted pre-tax profit of $2 billion was $548 million higher than the same quarter last year, driven by favorable costs and market factors, the company said.

Ford CFO Bob Shanks said the companyis improving its fiscal health as the industry moves further into new automotive technologies, such as electric and autonomous vehicles. Ford plans to bring an autonomous vehicle to market in 2021 and an electric vehicle in 2020.


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Category: Featured, General Update, News

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