Ford Motor Co reported a more than 50 percent drop in third-quarter net income on Thursday, saying its North American business suffered from lower sales, higher recall costs and a complicated introduction of a new pickup truck.
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The profit exceeded Wall Street expectations, however. The automaker said it still expected full-year earnings of $10.2 billion and a return to positive cash flow after burning through $2 billion in the third quarter.
Net income dropped to $961 million, or 24 cents a share, from $2.2 billion, or 55 cents a share, a year earlier.
Excluding one-time items, Ford said earnings were 26 cents a share, beating the analysts' average estimate of 20 cents compiled by Thomson Reuters I/B/E/S.
Third quarter revenue was $35.9 billion, down 6 percent, and North American operations revenue was $21.8 billion, down 8 percent.
Ford had signaled most of the major numbers at a September investors presentation, and the results released on Thursday were little changed. The company's shares were down about 1.4 percent at $11.76 in afternoon trading.
Ford's pretax operating margins were down by about half at 5.8 percent in North America and 3.3 percent worldwide.
���What���s happening to the company is what���s happening in North America,��� Chief Financial Officer Bob Shanks told reporters on Thursday.
Shanks said three factors accounted for a $1.6 billion decline in Ford���s North American pretax profit: costs of ramping up the new Super Duty pickup truck, which has an average price of about $62,000; a door-latch recall charge of $600 million recall; and lower profits from the company���s F-150 pickup truck.
Ford is cutting production of the F-150 in the fourth quarter and, in a new action, will idle one shift for a week at a plant in Kansas City, Missouri, to reduce inventories of the truck, Shanks said. The F-150 is Ford���s best-selling vehicle and one of its most profitable models.
The company said pretax profit in Europe jumped to $138 million from $9 million.
However, Shanks said the falling value of the British pound would cost Ford $140 million in the second half of 2015 and $600 million next year. Ford is 80 percent hedged against the currency for 2017, he said.
Income from Ford's Chinese joint ventures rose 26 percent to $320 million. "China is very, very strong," Shanks said.
(Reporting by Bernie Woodall; Editing by Lisa Von Ahn)