{"id":115722,"date":"2017-04-27T09:25:27","date_gmt":"2017-04-27T13:25:27","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=115722"},"modified":"2017-04-27T09:25:27","modified_gmt":"2017-04-27T13:25:27","slug":"ford-profits-slide-35-on-recalls-sluggish-sales","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2017\/04\/ford-profits-slide-35-on-recalls-sluggish-sales\/","title":{"rendered":"Ford Profits Slide 35% on Recalls, Sluggish Sales"},"content":{"rendered":"
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The surge in SUV demand drove up prices but Ford still saw overall sales dip in the U.S. and China.<\/figcaption><\/figure>\n

A flurry of headwinds put the drag on Ford Motor Co. earnings during the first quarter of 2017, the numbers dropping 35% to $1.6 billion.<\/p>\n

It didn\u2019t help that Ford\u2019s latest numbers are being compared to the best quarterly earnings in company history, the $2.2 billion profit the Detroit maker delivered between January and March 2016. On the upside, Ford\u2019s $0.40 earnings per share and $36.5 billion in total revenues did manage to beat Wall Street $0.35 earnings estimate, according to a poll of analysts by FactSet.<\/p>\n

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Subscribe Now!<\/figcaption><\/figure>\n

Among the challenges Ford faced this time around: declining sales, increased recall costs, as well as rising prices for steel and other raw materials. There was also some hefty spending to retool operations like the Michigan Assembly Plant to produce more of the trucks Ford needs in today\u2019s SUV and pickup-centric market, something the maker\u2019s CEO Mark Fields declared \u201can investment in Ford\u2019s future.\u201d<\/p>\n

\u201cFrom announcing exciting vehicles,\u201d Fields said in a statement, \u201cto initiatives such as our investment in (autonomous driving venture) Argo AI, we are fortifying our core business, while also investing in emerging opportunities that will deliver profitable growth.\u201d<\/p>\n

How those investments will pay off long-term remains to be seen, though Fields is trying to reposition Ford as a \u201cmobility company,\u201d rather than its traditional role as an automotive manufacturer. The company has announced tie-ups with Amazon, for example, allowing owners to access the high-tech firm\u2019s voice assistant Alexa with a tap of a button on the steering wheel. And it has promised to put a fully driverless vehicle on the road by 2021.<\/p>\n

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Ford CEO Mark Fields prefers to view the first quarter as "an investment in Ford's future."<\/figcaption><\/figure>\n

But building and selling cars remains the heart of the Ford global empire, and demand slipped in several key markets during the first quarter of this year. That included the U.S., where volume dipped more rapidly than an overall weakening market. Sales also were off in China, a critical market where Ford had seen rapid growth in recent years. Chief Financial Officer Bob Shanks blamed the expiration of tax incentives that spurred many buyers to act before the end of 2016.<\/p>\n

Overall, Ford sold about 1.7 million vehicles during the first quarter worldwide.<\/p>\n

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Ford’s big gains in China came to a screeching halt during the first quarter.<\/dd>\n<\/dl>\n<\/div>\n

(Gearing up: Ford’s new 10-speed automatic is a promising breakthrough. We test it out. <\/em>Click Here<\/a>.)<\/em><\/strong><\/p>\n

After years of losses, Ford did manage to earn some money in Europe \u2013 a fact all the more significant considering 17 years of ongoing losses led rival General Motors to announce the sale of its own European Opel and Vauxhall brands to France\u2019s PSA last month.<\/p>\n

Ford was in the black in Asia, as well, though it posted red ink in the Africa, Middle East and South American markets.<\/p>\n

Despite weakening sales, North American delivered the vast bulk of the carmaker\u2019s first-quarter profit, though pre-tax earnings were down 45%, to $2 billion. Like its rivals, Ford was buoyed by the continuing market shift from passenger cars to more profitable light trucks. The maker also has added more high-end models, like the Explorer Limited SUV. That helped boost the average transaction price for vehicles sold in North America by $1,971 compared to $506 for the industry overall.<\/p>\n

(Lincoln has big ambitions for the all-new Navigator. <\/em>Click Here<\/span><\/a> to check it out.)<\/em><\/strong><\/p>\n

<\/em><\/strong>Looking ahead, automotive analysts caution that the industry is entering a period of uncertainty. There is the likely slowdown in U.S. sales after three record years, the many changes being promised by the Trump Administration, and a number of issues clouding forecasts in China and a Europe in the midst of Brexit.<\/p>\n

In a recent regulatory filing, CFO Shanks said Ford is in a \u201csolid\u201d position this year, while the company expects \u201cbusiness to improve in 2018.\u201d<\/p>\n

On Thursday, the chief financial officer said Ford remains on track to deliver a pre-tax profit of $9 billion this year, down from $10.4 billion in 2016.<\/p>\n

On Wednesday, Fiat Chrysler Automobiles reported its earnings rose 34% for the first quarter, to 641 million euros, or $698 million. General Motors is set to announce its January-to-March results on Friday.<\/p>\n

(For the full story on FCA’s strong showing, <\/em>Click Here<\/span><\/a>.)<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

A flurry of headwinds put the drag on Ford Motor Co. earnings during the first quarter of 2017, the numbers dropping 35% to $1.6 billion. But Ford CEO Mark Fields sees the glass half-full, describing the results as “an investment in Ford’s future.” TheDetroitBureau.com has the story.<\/p>\n","protected":false},"author":2,"featured_media":115194,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/115722"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=115722"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/115722\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/115194"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=115722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=115722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=115722"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=115722"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=115722"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=115722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}