Market Overview

Ford Earnings Fall on Lower International Sales

Ford (NYSE: F) one of the big three auto manufacturers, earned $1.4 billion in the first quarter of 2012, $1.2 billion less than a year earlier, as auto sales decreased globally and the company reported losses in Europe and Asia, offsetting gains in North America.

Ford's $1.4 billion, or 35 cents per share, was down from $2.55 billion, or 61 cents per share, a year earlier. Pre-tax operating profit was 39, beating the 35-cent per share estimate of analysts surveyed by Bloomberg. Earnings also beat analysts' estimates of $1.34 billion for the Detroit, Michigan-based company.

European care sales generated a loss of $149 million compared to a $293 profit a year earlier as sales declined 60,000 to 372,000 and demand for parts lowered. Contribution and pension-related costs also increased in the quarter.

In the Asia Pacifica Africa unit the company reported a loss of $95 million compared to a profit of $33 million a year earlier as Ford continues to invest in the region and vehicle sales declined 25,000 to 217,000 in the quarter.

“Our team delivered a solid performance during the first quarter, with particularly strong results in North America, despite a challenging global external environment,” President and Chief Executive Officer Alan Mulally said in a press release issued today. Ford's pre-tax profit in North America increased to $2.1 billion from $1.8 billion a year earlier, the highest quarterly profit for the region since Ford began tracing it separately in 2000, as sales increased 36,000 units to 651,000 vehicles.

North America sales also increased for competitor Chrysler, which yesterday reported a net income of $473 million for the first quarter, compared to $116 million a year earlier, as the Auburn Hills, Michigan-based company's US market share increased to 11.2% from 9.2% a year ago and worldwide vehicle sales increased by one third, to 523,000.

Total vehicle sales for Ford decreased by 45,000 from the first quarter of 2011to 1.36 million.

Ford earnings continue to be weighed down by large pension plans. Today the company announced the offer of a lump-sum payment plan to about 90,000 eligible US former employees, who will be able to choose if they want to stay with the company's pension plan or receive a one-time payment. The company identified “substantial pension and post retirement health care and life insurance” as a factor reducing liquidity in today's statement.

General Motors (NYSE: GM) will report earnings May 3, and the company is expected to see a decline in earnings. Analysts surveyed by Thomson Reuters expect first-quarter operating profit of $1.38 billion, or 85 cents per share, down from $2 billion, or 95 cents per share, a year earlier.

Posted-In: Earnings News Best of Benzinga

 

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