Troubles in Ford Motor Co.'s home market — including a massive recall and the difficult launch of new heavy-duty pickups — are hurting the company's bottom line.
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Ford said Thursday its net income plunged 56 percent to $957 million in the third quarter, down from $2.2 billion in the July-September period a year ago.
The earnings, of 24 cents per share, compared to earnings of 55 cents per share in the July-September period a year ago. Adjusted earnings of 26 cents per share — which exclude one-time items — beat Wall Street's forecast of 20 cents, according to analysts polled by FactSet.
North America, with its record-setting U.S. sales and love affair with profitable SUVs and pickups, has been Ford's cash cow in recent years. But as U.S. sales peak, Ford is feeling the effects. Ford's North American sales were down 11 percent in the quarter, and revenue dropped 8 percent. The company has already announced temporary closures of four North American plants this month to bring production in line with demand.
"What's happening to the company is really about what's happening in North America," Ford Chief Financial Officer Bob Shanks said.
And it's likely to keep happening. Ford has said it still expects a full-year pretax profit of $10.2 billion, but that's down from its initial forecast of $10.8 billion because of the recall. Ford has said its profits will likely fall next year before rebounding in 2018.
Ford's shares fell 21 cents, or 1.8 percent, to $11.67 in morning trading. Its shares are down almost 22 percent over the past year.
Dearborn, Michigan-based Ford had some big one-time costs in the third quarter. The company spent $600 million — $40 million less than it initially projected — to replace faulty door latches on 2.4 million cars and trucks. It is also launching its first all-new Super Duty pickup in 18 years, with all-aluminum sides that required a complete revamp of its Kentucky truck plan.
Ford's overall revenue fell 6 percent to $35.9 billion. Automotive revenue was $33.3 billion, which matched Wall Street's expectations.
Worldwide sales fell 4 percent to 1.5 million vehicles worldwide. They were down in every market except Asia.
That's down from its previous forecast of $10.8 billion because of the recall. It's also down from Ford's record-setting profit of $10.8 billion in 2015.
Ford's North American pretax profit declined 55 percent to $1.3 billion. The company also lost $295 million in South America and $152 million in the Middle East and Africa.
Europe eked out a $138 million profit, its best third quarter in 2007. But Shanks warned that Ford faces a $600 million charge in the region in 2017 because of the Brexit vote. The vote will cost Ford $200 million this year.
Ford also earned $131 million in its Asia Pacific region, where its sales and market share grew.
Ford's operating cash flow was negative $2 billion for the quarter; Shanks said it would be positive again in the fourth quarter.