Ford surprised investors with a strong set of financial results for the first-quarter and said that it expects 2019 to be better than the previous year despite a ‘volatile environment’. The results will be very welcome for Ford CEO Jim Hackett as evidence that his turnaround strategy (‘global redesign’) is gaining traction. Ford shares were up in after-market trading last night.

Ford posted Q1 net Income of USD1.1bn and adjusted EBIT of USD2.4bn driven by strong sales of trucks in North America and strong results at its Ford Credit unit. Ford’s North America Q1 EBIT margin was up 0.9 percentage points to 8.7%, boosted by strong net pricing and product mix. There was a strong performance in the market from its F-Series pickup trucks and its new Ranger midsize pickup.

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Ford also said it is making progress in operations outside North America, with a Q1 EBIT loss of USD196m, about flat year over year and a USD632m improvement from the prior quarter. Europe was profitable (USD57m) in Q1 and improved USD256m over the prior quarter. Ford said Europe results already benefited from lower structural costs year over year, reflecting  ‘early benefits of business redesign efforts’. 

Ford posted a Q1 loss in China of USD128m but said the China EBIT loss improved USD22m year over year and USD406m from the prior quarter.

Ford said Q1 revenue was down on lower volume (Q1 revenue off USD1.6bn on last year at USD40.3bn), driven by global industry decline and the discontinuation of the North America Focus, as well as the production ramp up for the all-new Explorer.

Net income was down (at USD1.1bn, USD0.6bn lower than last year’s Q1) primarily driven by special items charges of about USD600m, mostly associated with the exit of heavy truck operations in South America and the ‘redesign’ of European operations including the restructuring of the company’s Russia joint venture.

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“With a solid plan in place, we promised 2019 would be a year of action and execution for Ford, and that’s what we delivered in the first quarter,” said Jim Hackett, Ford president and CEO. “We’re pleased with the progress and the optimism that it brings.”

Chief Financial Officer Bob Shanks told reporters that Ford has more confidence its 2019 results will be better than last year’s, but also warned of a “volatile environment with very strong competition.” Shanks also cautioned that the first quarter would likely be Ford’s best quarter for the year.