Ford Motor Co's (F) operating earnings for the second quarter beat Wall Street expectations as better-than-expected profit in North America and Europe countered weaker results in Asia Pacific and South America.
Continue Reading Below
Ford's Chief Financial Officer Bob Shanks said lower costs helped boost the company's pretax profit in North America to a record $2.44 billion. Nine analysts surveyed by Reuters expected a pretax profit of $2.04 billion.
Costs in the second half of the year are expected to rise as the company introduces more products, including the most important vehicle in its portfolio, the F-150 pickup truck. The company's operating margin in North America improved to 11.6 percent, from 10.6 percent a year ago.
Ford affirmed its full-year guidance for a pretax profit of between $7 billion and $8 billion.
The company's outlook for South America was downgraded to a greater loss than previously expected. It now anticipates breaking even or taking a loss in the second half of the year.
For the quarter, South America showed a loss of $295 million, against a loss of $182 million expected by nine analysts surveyed by Reuters.
Continue Reading Below
The Asia-Pacific region's operating profit of $159 million was less than the $260 million expected, on average, by analysts surveyed by Reuters. Shanks said most of that profit came from China, but he didn't give a breakdown.
Ford's market share in China, the world's biggest car market, rose to a record 4.6 percent.
Profit in Europe, the first for the company in the region in three years, "clearly shows that the transformation plan is working," said Shanks of Ford's restructuring efforts that have included the closing of a plant in Belgium.
One-time items in the quarter included an accounting charge of $329 million because of poorer-than-expected cash flow in Russia, where Ford's has a joint venture with Russian carmaker Sollers.
The quarter was Ford's last one under the leadership of Alan Mulally, who retired as chief executive officer, making way for current CEO Mark Fields.
Excluding one-time items, Ford earned a profit of $2.6 billion, or 40 cents per share, which topped the 36-cent-per-share forecast by analysts surveyed by Thomson Reuters I/B/E/S.
Net income in the quarter was $1.3 billion, or 32 cents per share, up from $1.23 billion, or 30 cents per share, a year earlier. Quarterly revenue of $37.4 billion compared with $37.9 billion a year ago.
The F-150 will begin production at Ford's Dearborn truck plant in October, and at its Kansas City, Missouri plant early next year.