Ford Motor Co.'s first-quarter net income fell 35% over the same year-ago period, dented by safety-recall expenses, higher engineering and commodity costs and weaker sales in the car company's core U.S. market.
The No. 2 U.S. auto maker on Thursday reported $1.6 billion in net profit for the three-month period, down from $2.5 billion in the first-quarter of 2016, when strong demand for a newly redesigned F-150 pickup truck helped Ford post its best quarterly operating profit in history.
Adjusted earnings per share were 39 cents in the first quarter, beating Wall Street expectations of 36 cents.
"The results were solid but it was a tough comparison" to last year's first- quarter results, Ford Chief Financial Officer Bob Shanks said on Thursday.
Revenue for the first-quarter increased by 4% to $39.1 billion, driven by a favorable mix of more profitable pickups trucks and SUVs.
Ford confirmed full-year operating guidance of $9 billion for 2017.
First-quarter adjusted pretax profits were down 42% to $2.2 billion as the company also faced headwinds from a stronger U.S. dollar and lower sales in China, the world's largest auto market.
Operating profits were also dinged by a $295 million recall expense disclosed in March covering nearly a half-million vehicles with fire risks and faulty door latches. This was the second time in less than a year that safety concerns have hurt the bottom line.
Ford is coming off one of its most profitable periods in history with North America benefiting from two consecutive years of record U.S. car and truck demand.
Ford earned a historically high $10.4 billion in operating profits last year but results were down slightly from 2015's record of $10.8 billion.
Now, amid plateauing U.S. auto sales and heavy discounting across the industry, the car maker is struggling to keep its profit momentum going. At the same time, Ford is investing heavily in electric cars and autonomous vehicles as a way to diversify beyond its auto-making business and catch up to rivals in the automotive industry and new tech startups.
Operating profits for Ford's North American operations were $2 billion in the first-quarter, down 35% compared with the same period a year ago.
Margins also slipped in the first-quarter to 8.3% in the company's core North American business, from a lofty 12.9% a year ago.
In Europe, Ford posted a pretax profit of $176 million, compared with $434 million in the year-ago period with exchange rate and Brexit headwinds offsetting higher sales volumes.
In Asia Pacific, Ford recorded a $124 million operating profit, down from $220 million a year ago, as the auto maker continued to struggle with cooling new-car demand and the expiration of a tax subsidy on small-engine vehicles last year.
Ford's operating loss in South America continued, with the auto maker reporting $244 million in red ink for the just-ended quarter, compared with $256 in the year-ago period.
Write to Adrienne Roberts at Adrienne.Roberts@wsj.com and Christina Rogers at email@example.com
(END) Dow Jones Newswires
April 27, 2017 07:49 ET (11:49 GMT)