Ford Q3 pretax profits drop to $1.18BFri, 24 Oct 2014 16:28:00 EST
Following positive third quarter financial results recently from General Motors, rival Ford took a tumble in Q3. The automaker posted pre-tax profits of $1.18 billion, compared to about $2.59 billion in Q3 2013, a drop of around 54 percent. Net income also suffered with $835 million made in the quarter, versus $1.272 billion last year, a decline of about 34 percent. The Blue Oval blamed the gloomy figures on three reasons in its release: "lower volume, higher warranty costs and adverse balance sheet exchange effects."
There were problems of one kind or another in practically every region. North America experienced higher warranty costs than expected, partially due to recalls. The sales volume for the quarter was 665,000 units, versus 725,000 in Q3 2013, and pre-tax results amounted to $1.41 billion versus $2.296 billion last year.
South America and Europe both posted worse pre-tax results than last year. On the bright side, European volume was up slightly to 321,000 vehicles, from 303,000 in Q3 2013. The Middle East and Africa also lost $15 million, but that was an improvement compared to the $25 million loss previously experienced in this region.
The Asia Pacific region was also a mixed bag. Volume increased to 346,000 units, but pre-tax financials were $44 million, compared $116 million last year. According to Ford's release, the reason for the change is that the company is opening five factories there in the next nine months and launching Lincoln in China.
Ford was optimistic about future growth, though. It said that one of the reasons for falling volume was changing dealer stock in preparation of new models. In 2015, those updates should start being reflected on he balance sheet with "all five Automotive regions improving on 2014 results," according to the Blue Oval's release. Ford's results can be viewed in total as a PDF, here.
By Chris Bruce
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