Ford Motor Company has booked first quarter 2013 pre-tax profit of $2.1bn, dragged down $147m year on year by Europe and South America, thanks to record results in North America and “continued solid performance from Ford Credit”.
Net income for the first quarter rose $215m to $1.6bn.
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“Our strong first quarter results provide further proof that our One Ford plan continues to deliver,” said Alan Mulally, Ford president and CEO.
Wholesale volume and revenue were each about 10% higher than a year ago thanks to good results in North America and Asia Pacific Africa.
Ford North America wholesale volume was up 17% to 761,000 units and revenue improved 20% to $22.3bn. Pretax profit rose to $2.4bn from $2.1bn though operating margin dipped 0.5% to 11%.
A fall in South American pre-tax results ($218m loss vs $54m profit) and operating margin (-9.4% vs 2.3%) was blamed on unfavorable exchange, most of which related to Venezuela, including thedevaluation of the bolivar. Currency weakening in Argentina was also a factor.
Ford Europe’s first quarter was, as expected, another train wreck. Revenue fell $0.5bn to $6.7bn and the pre-tax loss soared to $462m from $149m in 2012 which Ford blamed on higher structural costs, including restructuring (mainly accelerated depreciation), and higher pension expense due to lower discount rates. Market factors and exchange also were unfavorable.
The company nonetheless increased retail market share for the five major markets in western Europe, which it said is critical to margins, residuals and brand health, and improved quality and customer satisfaction.
Southampton assembly and Dagenham stamping and tooling operations should be closed by mid-year and discussions continue at the assembly plant in Genk, Belgium, where hourly employees recently ratified a package of proposed separation benefits, and salaried employees now have reached agreement on a tentative proposal subject to ratification.
Full year 2013 guidance for Europe remains unchanged, with the company expecting a loss of about $2bn as the outlook for the business environment in Europe remains uncertain.
“While it is possible that economic and industry conditions will begin to stabilise later this year, recent economic indicators are mixed. Despite the challenging environment, the company is progressing toward its goal of a profitable, growing Ford Europe by mid-decade,” Ford said.
Ford Asia Pacific Africa booked strong growth in wholesale volume and revenue and the improvement in pre-tax results ($6m profit vs $95m loss) and operating margin mainly reflected favorable market factors, as well as higher royalties and subsidiary profits.
Ford Credit saw an increase in first quarter pre-tax profit from $452m to $507m and projected full year pre-tax profit about equal to 2012.
“We continue to expect 2013 to be another strong year, as we go further in strengthening our global product lineup and improving the competitiveness of our operations,” Mulally said.
