March 20, 2023

Ford Sees Little Change in Net Income

Ford, the second-largest American automaker, said Tuesday that it earned $1.63 billion in the quarter compared with $1.64 billion in the same period last year. Its global revenue dropped slightly, to $32.1 billion, down from $33.1 billion in the third quarter of 2011.

The results underscored both Ford’s success in its home market and its festering problems in Europe, where the auto market has fallen to its lowest sales levels in nearly 20 years.

Ford said its pretax profit in North America increased to $2.32 billion in the quarter from $1.55 billion a year ago. The results were driven by the introduction of new vehicles, like the Escape S.U.V., and higher transaction prices.

But its European operations floundered because of lower sales and higher incentives. Ford reported a pretax loss of $468 million in the region, compared to a pretax loss of $306 million in the third quarter last year.

Ford has now lost more than $1 billion in Europe so far this year and has said it expects its full-year loss to top $1.5 billion. Last week, the company said it would close three factories in the region and eliminate 5,700 jobs to better balance production there with shrinking demand for new vehicles.

The company’s chief executive, Alan R. Mulally, said Ford would continue to face stiff challenges in Europe as it restructures.

“While we are facing near-term challenges in Europe, we are fully committed to transforming our business in Europe by decisively matching production to demand, improve revenue through new products and a stronger brand, improve our cost efficiencies and take advantage of opportunities to profitably grow our business,” Mr. Mulally said in a statement.

Ford’s other regional operations contributed little to its bottom line during the quarter. The company said it earned $45 million in pretax profit in Asia, compared with a $43 million loss a year ago. Pretax profit in South America fell to $9 million, down from $276 million a year ago.

The healthy profit in North America reflected Ford’s dramatic turnaround in its home market since the financial crisis that crippled the American auto industry in 2008. Unlike its Detroit rivals, General Motors and Chrysler, Ford survived without a government bailout or bankruptcy filing.

Since then, Ford has revamped its product lineup to offer a broader range of smaller, more fuel-efficient models. The company said its operating profit in North America was its highest since 2000, and it forecast similar results through the remainder of the year.

“Ford’s more balanced product mix with a stronger presence in the small car segments enabled the company to operate at highly profitable levels in the North American and Asian markets, whereas the European operations continued to struggle,” said Jesse Toprak, an analyst with the auto research site TrueCar.

Ford ended the quarter with $24.1 billion in automotive cash reserves, an improvement from $20.8 billion a year ago.

The company produced 1.36 million vehicles in the third quarter, about the same number as a year ago. Ford said it will build 1.48 million cars, trucks and S.U.V.’s in the fourth quarter, an increase of 112,000 from the same period in 2011.

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