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July 28, 2016

Ford Q2 net profit slips $190m to $2bn

Ford Motor Company booked net income down US$190m to $2bn and an adjusted pre-tax profit off $293m on sales up $2.2bn to $39.5bn in the second quarter of 2016.

Ford Motor Company booked net income down US$190m to $2bn and an adjusted pre-tax profit off $293m on sales up $2.2bn to $39.5bn in the second quarter of 2016.

The automaker wholesaled 1.7m vehicles worldwide, down 200,000. Automotive segment operating marging dipped 0.7% to 7.7%.

First-half net income rose 33% to $4.4bn while adjusted pre-tax profit was up 35% to $6.8bn on sales up 8%.

The North America unit booked Q2 pre-tax profit of $2.7bn, down $135m on sales of $23.8bn, down $0.5bn; operating margin dipped 0.9% to 11.3% and wholesale unit volume dipped 1,000 to 815,000.

“We delivered another strong quarter – one of our best second quarters ever – and record pre-tax profits for the first half of this year. We remain committed to delivering another full year of strong profitability, even as we address some new risks and market challenges around the world,” said Ford president & CEO Mark Fields in a statement.

In Europe, the automaker booked record second quarter pre-tax profit of $467m, “nearly triple the same period a year ago”, due to cost cuts, better model mix and wholesale volume up 11% to 430,000 units and revenue rising 16% ($1.1bn) to $8.1bn. 

Results elsewhere were mixed.

South America was worst with the pre-tax loss growing $80m year on year to $265m in the red, unit wholesales down 15,000 to 83,000, sales off $0.2bn to $1.3bn and negative operating margin widening 8.9% to 21.3%.

The Asia Pacific pre-tax loss reduced from $202m in Q2 2015 to $8m in the red (-0.3% margin) on sales up $0.4bn to $2.8bn. Wholesale volume fell 21,000 units to 328,000.

In the Middle East and Africa, the pre-tax loss widened $19m to $65m and negative operating margin increased 2.1% to 7.2% on sales flat at $1bn. Wholesale volume fell 6,000 units to 38,000.

Outlook

Ford said it expected “another strong year of results” and was “committed to full year guidance of company pretax profit and operating margin equal to or better than last year”.

However, it added, the “company now sees risks challenging achieving guidance” and the “entire Ford team” is “working to mitigate the risks”.

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