Ford Reports Best Quarterly Profit in North America

DETROIT (Detroit Free Press/TNS) -

Ford earned $1.9 billion in the second quarter, up 44 percent from a year earlier, largely on the strength of sales of larger, higher-priced and more profitable vehicles in the U.S.

On an earnings-per-share basis, Ford made 47 cents, exceeding the 37 cents per share consensus among Wall Street analysts.

In trading Tuesday, Ford shares rose 28 cents, or 1.9 percent, to $14.83.

“We delivered an outstanding second quarter, a great first half of 2015, and we are confident the second half of the year will be even stronger,” Ford CEO Mark Fields said in a statement. Before taxes, Ford made $2.6 billion in North America, more than doubling what it made in the region in the first quarter of 2015, and a 6.4 percent improvement from a year earlier.

And the second half should be even more profitable, said Chief Financial Officer Bob Shanks. That’s because the highly profitable F-150 pickup truck didn’t contribute to the improvement in second-quarter profits.

That should change as dealers receive ample quantities of the aluminum-body trucks and consumers who are more interested in the more basic versions of the truck can find them.

Shanks said the average selling price for an F-Series truck, including the larger F-250 and F-350, was $44,100 in the second quarter, up $3,600 from the second-quarter of 2014, despite reports that some dealers are offering significant discounts on the F-150.

This is Ford’s last financial report before the deadline expires on its four-year labor agreement with the UAW on midnight Sept. 14. The optimism over the North American market is strong enough that the company reconfirmed guidance of global pre-tax profit for the full year between $8.5 billion and $9.5 billion.

While larger corporate profits also benefit UAW workers through annual profit-sharing checks, UAW President Dennis Williams has said he expects a base wage increase for members hired before 2007 who have not had a raise in at least eight years.

Management will want to restrain costs to prepare for a downturn, but Fields sounded as if he doesn’t expect U.S. sales to fall anytime soon.

“There’s a lot of discussion about the market being at a peak. I look at it as being at more of a plateau,” he said.

In Europe, Ford lost $14 million before taxes; it made $14 million before taxes a year earlier. The automaker made $192 million in Asia Pacific, lost $185 million before taxes in South America and lost $46 million in the Middle East and Africa.

Global revenue slipped by $100 million from a year earlier, to $37.3 billion. Chief Financial Officer Bob Shanks said that reflected the impact of a strong U.S. dollar. A strong dollar reduces revenue made in other markets such as Europe because sales in euros or other currencies are worth fewer dollars than they were a year ago.