Ford workers block the entry to the plant in Genk, Belgium, which Ford said last week it will close, eliminating 4,300 jobs, to cut losses in Europe.(Photo: THIERRY CHARLIER AFP/Getty Images)
Ford reported a third-quarter net profit of $1.6 billion, driven by its best-ever quarter in North America.
Pretax
profits of $2.3 billion in North America more than made up for a $468
million pretax loss in Europe, but the drag left the net results down 1%
from the quarter a year ago.
revenue was $32.1 billion for the quarter, down 3% from a year ago, and operating profit was $2.2 billion.
While
Ford remains very dependent on North America, the company said it
turned to a profit in Asia and Africa and remained in the black in South
America.
The earnings per share of 40 cents beat Wall Street expectations of 30 cents and 34 cents a year ago.
The
company narrowed its guidance for U.S. auto sales this year to 14.7
million. Until now, Ford gave a range of 14.5 million to 15 million.
As
expected, the results were stronger than the second quarter when Ford
reported a 57% drop in earnings of $1.04 billion with losses in Europe
that reached $404 million. Pretax earnings were $1.8 billion.
Ford
this month had said its losses in Europe this year could exceed $1.5
billion -- up from a $1 billion forecast that surprised analysts in
July. Some of the additional loss is related to costs to its plan also
announced this month to shutter three operations in the U.K. and
Belgium, starting next year. Ford is cutting 5,700 jobs in addition to
offering 500 salaried buyouts.
"While we are facing near-term
challenges in Europe we are fully committed to transforming our business
in Europe by moving decisively to match product to demand," said CEO
Alan Mulally in a statement.
South America saw modest operating income of $9 million, below a year ago.
In
Asia-Pacific and Africa where Ford is investing heavily to get a bigger
foothold in the market, especially China, the automaker had a $45
million pretax profit compared with a $43 million loss a year ago.
"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 emerging Asian markets whereas the European
operations continued to struggle," said Jesse Toprak, senior analyst at
TrueCar.com.
"Despite the unfavorable year-over-year comparison
and lower market share due to the Japanese automakers' production
constraints last year, Ford's total domestic (U.S.) sales are up with
lower incentives spending and higher transaction prices, indicating
improved profitability for the company," Toprak said.
On Monday, Chrysler reported a third-quarter profit of $381 million, up 80% from a year ago.
General Motors is scheduled to report its earnings Wednesday.
Detroit Free Press