Ford Profit Falls 57% To $1 Billion In 2Q
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DEARBORN (WWJ/AP) - Ford’s profit fell 57 percent in the second quarter as losses in Europe and Asia swamped a healthy performance in North America.
The company also lowered its full-year profit forecast on Wednesday. The automaker said it still expects a “strong” operating profit, but it will be lower than the $8.7 billion in 2011. Previously Ford had expected to make about the same amount as 2011.
Ford now expects to lose more than $1 billion in Europe this year, more than double its estimate at the beginning of this year.
Ford earned to $1 billion, or 26 cents per share, in the quarter, compared with $2.4 billion, or 59 cents, a year earlier. Without one-time items, including the sale of two parts factories, it earned 30 cents. That beat Wall Street’s forecast of 28 cents.
Quarterly revenue fell 6 percent to $33.3 billion.
Ford posted a $2 billion profit in North America in the second quarter thanks to higher pricing and highly anticipated new vehicles like the Ford Escape. That was up 5.3 percent from a year earlier.
“North America just had excellent results and it’s driven by fantastic product, a brand that’s strong and just what’s attracting consumers,” Chief Financial Officer Bob Shanks told WWJ Newsradio 950
But Ford lost $404 million in Europe, down from a profit of $176 million last year, as sales slowed because of the economic crisis. Ford said it sold 359,000 cars and trucks in the region, down 15 percent from the same quarter in 2011. Ford also lost market share in Europe as it refused to ramp up deals to lure buyers.
“We have our eyes wide open and are looking at Europe, sort of, very realistically. We don’t see the issues that everyone is facing in Europe as being sort of cyclical in nature, we think they’re more structural, so they’re going to be longer terms in terms of what it’s going to take to get the overall economy back on track there,” said Shanks.
Ford lost $66 million in Asia, where it is in the midst of a multiyear plan to increase production and vehicle offerings. That was down from a $1 million profit in the same quarter a year earlier.
Ford’s profits also narrowed considerably in South America, where it is being hurt by older products and rising tariffs. The company earned $5 million in South America in the second quarter, down 98 percent.
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