Financial News

  • 28 April 2014, 6:27

Ford Profit Drops 39% In First Quarter

US car giant Ford has seen its net income in the first-quarter fall by 39%, compared to the same time last year.

Ford said income dropped to $989m (560m), down from $1.64bn (875m) in the first three months of 2013.

Despite a profit drop the company said worldwide sales rose in the period, boosted by growth in Asia and Europe.

However, ongoing fragility in North America dragged down the firm's profit.

Shares fell nearly 4% in early trading as the result was lower than Wall Street's expectations.

It said exceptional items in the period included a charge of $122m (72m) for plant closings in Europe.

Revenue rose slightly to $35.9bn (21.4bn), with worldwide sales figures up 6% to nearly 1.6 million vehicles.

But US sales dropped 3% to 580,260 vehicles in the quarter, citing bad weather and low buyer interest in smaller, fuel efficient cars like the Focus and C-Max hybrid.

While its iconic F-Series pickup continued to see gains, sales of other key vehicles like the Fusion sedan and Escape SUV were down.

In China, first-quarter sales spiked 45% to 271,321 vehicles.

And in Europe, where the company lost sales amid restructuring post-recession, vehicle sales rose 11% to 326,000, however it still lost $194m (115m).

The company was also hit by a $400m (240m) charge for warranty reserves and repair costs.

It has also put aside $340m for potential recalls and spent another $60m on two US recalls.

Ford's results come a day after General Motors saw a profit plunge of 85% in the quarter, on the back of a series of vehicle recalls.

Advertisement