Ford posted a record quarterly profit following strong sales in Europe and moving more trucks in North America.
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Ford reported a record operating margin of 12.9 percent in North America, but that will likely decline as the year progresses.
The company also reported a record high pretax profits in its North America region of $3.1 billion.
Mark Fields, Ford President and CEO said, “The first quarter was an absolutely terrific start to the year – an all-time record for the company, with very strong performance across the business”.
Worldwide sales rose 10 percent to 1.7 million. Low gasoline prices have spurred demand for the most profitable vehicles on dealer lots – trucks and SUVs, leading to robust profits for Detroit’s Big Three and other major players in the American market.
For the full year, Ford said it expects sustained, strong results with profitability across all parts of its business, with the exception of South America. The Dearborn, Michigan-based automaker earned 61 cents per share in the January-March period, up from 29 cents a year ago. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 43 cents per share. Chief Financial Officer Bob Shanks said the full volume of the two vehicles would have increased revenue by a billion dollars. Fields didn’t say when the company might release such a vehicle, but said Ford will be competitive. Ford’s European profit during the first quarter topped all of the company’s European earnings collected during the entirety of 2015. But investors have largely shrugged off the results, anxious that with US auto sales already nearing record highs the traditionally cyclical industry has nowhere to go but down. On an operating basis, the company earned 68 cents per share.
“Make no mistake, this was an impressive beat”, Brian Johnson, an analyst at Barclays, wrote in a note today.
China also contributed to Ford’s results with profit in its Asia Pacific region more than doubling to $220 million in the latest quarter.
A couple of year ago, Ford set off to redesign the F-150, an iconic truck that has been the best selling vehicle in the US for decades.
Ford was losing money in Europe a year ago but fortunes continue to improve.
Sales of higher-profit SUVs and trucks helped lift Ford’s operating margin to a record 9.8 percent.
Automotive sales rose to $35.2 billion.
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“I don’t know if it’s as good as it gets”, Shanks said.
