Ford’s net income fell 6.5 percent to $924 million in the first quarter, hurt by lower sales and the impact of a stronger U.S. dollar.
But the Dearborn-based automaker says the picture should improve as the year progresses, and it still is aiming for a full-year pretax profit of $8.5-$9.5 billion, up from $6.3 billion in 2014.
“We feel we are very much on track to that breakthrough year we talked about,” Chief Financial Officer Bob Shanks said Tuesday.
First-quarter earnings of 23 cents per share – compared with earnings of 25 cents per share in the same quarter a year ago – were short of Wall Street’s expectations. Analysts surveyed by FactSet had forecast earnings of 26 cents per share.
One reason for the miss: Analysts had forecast a tax rate of 29 percent for the quarter, but Ford’s actual rate was 34 percent. That difference was worth about 2 cents per share, the company said.
Revenue fell by 5 percent, or $2 billion, to $33.9 billion. That also fell short of forecasts of $34.3 billion.
Global sales fell 1 percent to 1.6 million. Sales were up in Asia and Europe but fell in North America, South America and the Middle East and Africa.
Ford said the continuing launch of its new F-150 pickup, which went on sale late last year, hurt North American sales because dealers don’t yet have a full inventory. Two plants, in Michigan and Missouri, make the F-150, but only the Michigan plant was fully operational in the first quarter after a longer-than-usual changeover to make the truck’s body out of aluminum instead of steel. Ford’s Kansas City plant started producing the new truck on March 13.
Shanks said F-150 sales were down 40 percent for the quarter, or about 60,000 vehicles, and dealers aren’t expected to have normal levels of trucks on their lots until this summer. Sales of the Ford Edge SUV were also down significantly – about 15,000 vehicles – as the company changed over to an updated model.
North American pretax profit fell 11 percent to $1.3 billion. Shanks said normal inventories of the F-150 and Edge – two of the company’s most profitable vehicles – could have improved pretax profits by $1 billion and raised the region’s operating margin – which was 6.5 percent for the quarter – to more than 10 percent.
While sales rose in Europe, particularly for commercial vehicles like the Transit van, revenue fell because of the stronger U.S. dollar. Ford lost $185 million in Europe in the first quarter, a $9 million improvement from a year ago.
In Asia, pretax profit fell by more than half to $103 million, partly because of the strong U.S. dollar and because of the cost of launching new vehicles, including the Lincoln luxury brand. Shanks said that should improve in the second half of the year as new plants in China and India ramp up production.
Ford cut its losses in South America to $189 million, down from $510 million a year ago. Last year, Ford took a $310 million charge in South America to offset currency devaluation in Venezuela.
Like other U.S. companies, including General Motors Co., Ford’s global profits were impacted by the strong U.S. dollar, which has climbed 8 percent this year against most major currencies.