Ford Motor Co. on Thursday reported second-quarter earnings of $2 billion, down 9 percent from the same period a year ago.
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The second biggest American automaker reported revenue of $39.5 billion, higher than the Street estimation of $36.31 billion. “We remain committed to delivering another full year of strong profitability, even as we address some new risks and market challenges around this world”.
Ford also posted a best-ever second quarter in Europe, where it made $467 million, which included a $60 million hit from the Brexit decision.
“We’re committed to getting to our guidance, but it is at risk”, Ford CFO Bob Shanks told reporters at Ford’s headquarters.
The automaker’s profit margin in North America was 11.3%, down from 12.2% a year earlier.
Pretax profit of $2.99 billion for the quarter was $293 million less than previous year.
Ford has changed its sales forecast, which includes medium- and heavy-duty trucks, from 17.5 million-18.5 million vehicles, down to 17.4 million-17.9 million vehicles.
But, as General Motors warned last week, there will be a negative impact in the second half of the year as Ford makes adjustments in the wake of the United Kingdom vote last month to leave the European Union.
“The team understands we have to respond to the new reality we’re facing”, Shanks said. “We’re at a strong level”.
But, he added, “we don’t see growth in the near term”.
They include reducing costs in manufacturing and other operations, implementing improved “go-to-market plans” in the USA and China to bolster revenue, and using analytics to optimize vehicle mix and pricing around the world.
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Ford booked a charge of about $100 million related to the recall of vehicles equipped with Takata air bags that are at the root of the nation’s largest ever recall. He said costs associated with the launch of Ford’s Super Duty pickup truck in the current quarter will have a negative impact on financial performance. The changeover will not be as disruptive as the F-150 switch past year, but it still will ding Ford’s revenue and profits.
