F-Series truck profits drive up 3rd-quarter earnings at Ford
Ford announced Thursday a third-quarter profit of $1.6 billion, which reflects a 63% increase from one year ago.
On a per-share basis, the Dearborn automaker earned 39 cents per share, beating the 33 cents per share average, based on a FactSet survey of Wall Street analysts. That’s up from 26 cents per share a year earlier.
Revenue from sales in North America, especially trucks and SUVs, drove the better-than-expected results under the leadership of CEO Jim Hackett, a former office furniture executive who took the helm of Ford in May.
The company is seeing higher profits generated by its F-Series pickups in the U.S., Canada and Mexico. The average F- Series truck sold for $2,300 more than a year ago, or $45,400 in September. Ford is seeing strong demand for the most expensive packages — Lariat, King Ranch, Platinum – in the Super Duty trucks — and the Raptor performance version.
Ford’s revenue worldwide increased 1% to $36.5 billion during the third quarter, and its pre-tax profit jumped 40% to $2 billion.
CFO Bob Shanks said in his morning briefing, “It was a solid quarter, a good quarter. We’ve seen improvements in growth, profitability and cash flow.”
In what analysts are calling a high-profile “second date” with Wall Street investors, CEO Hackett reported having an enormous pile of cash on hand and bigger profits on the nation’s most popular pickup truck. The F-150 pickup is a gift that keeps on giving, Hackett said in response to an investor question.
“This quarter demonstrates that our team’s focus on fitness is showing early promise. But we also know that we must accelerate that progress in the nearterm, while taking the necessary steps to fundamentally redesign our business operations to be more fit for the long term,” Hackett said.
Ford said North America con- tinues to generate most of the profit, posting earnings before taxes of $1.7 billion, up about
$400 million, or 33%, over the same period last year. Elsewhere the company posted a pre-tax loss of $86 million in Europe and a profit of $289 million in the Asia Pacific region, more than double its 2016 figure.
Ford has faced a series of challenges this year, including shortages its top-selling new Fiesta in Europe, carbon-monoxide issues involving police vehicles, recalls and a CEO facing Wall Street analysts hungry for specifics related to cost-cutting and strategies related to autonomous vehicle technology and ride-sharing.
Ford said issues that kept the third quarter from being even stronger were higher steel costs, the Brexit vote that split the United Kingdom from Europe and negative impacts tied to currency exchange rates of the sterling, Canadian dollar, Indian rupee, Thai baht and Argentine peso.
Wall Street has failed to reward Ford this year as much as its rivals General Motors and FiatChrysler. Over the past three months, Ford and Tesla stock grew 5%, while GM stock jumped
26% largely because of its perceived leadership in driverless cars and shared mobility. For overall perspective, the S&P 500 gained 4%.
“We’re freely embracing a revolution,” Hackett said on his investor call Thursday. “I can assure you we’re committed to transforming our business.” He highlighted driverless technology and partnerships with Lyft and Domino’s, noting that pizza is a multibillion dollar industry.