Ford profit falls in third quarter on truck costs
DEARBORN, Mich. (AP) — Ford's new aluminum-sided F-150 will be a lot lighter and more efficient when it goes on sale later this year. But for now it's a serious drag on profits.
Ford's net income dropped 34 percent to $835 million in the third quarter, largely due to the cost of launching the new pickup.
The company closed its Dearborn truck plant for five weeks during the quarter, contributing to $700 million in negative cash flow. Ford also cut back on truck sales in order to preserve inventories while it readies the new aluminum-sided truck.
That hurt pretax profits in North America, which fell 39 percent to $1.4 billion. Sales in the region dropped 8 percent.
Ford lost money in Europe, South America and in its Middle East and Africa division. Sales were up in Asia, but investment in new plants and products there caused pretax profits to drop 62 percent to $44 million.
Ford earned 21 cents per share, down from 31 cents in the July-September period a year ago. Without one-time items, including separation costs in Europe, Ford earned 24 cents. That beat Wall Street's expectation of 19 cents, according to analysts polled by FactSet.
Revenue fell 2.5 percent to $34.9 billion, better than the forecast of $33.7 billion.
Ford has repeatedly warned investors that this year would be difficult. Last month, the company dropped its full-year pretax profit forecast to $6 billion, citing falling sales in South America and a $500 million charge for recalling 850,000 vehicles with defective air bags. That's down from $8.6 billion last year.