Ford registers gains of $2.2 billion
Detroit (US), October 31, 2012
Ford has posted a third-quarter profit that trounced Wall Street forecasts, driven by higher vehicle prices and record profit margins of 12 per cent in North America.
Worldwide, Ford earned $800 million more through price increases than it did last year. Half that jump came from North America, where Ford has earned more than $2 billion and posted margins over 10 per cent for three quarters in a row.
The No 2 US carmaker's strength in North America offset the effects of the sharp industry downturn in Europe, where Ford expects to lose at least $3 billion over the next two years, as well as its lagging position in growth markets, such as China.
Ford posted a pre-tax operating profit of $2.2 billion, or 40 cents per share, beating analysts' average estimate of 30 cents per share, according to Thomson Reuters I/B/E/S. In North America, Ford earned $2.3 billion with a 12 per cent operating margin.
North America will continue to "carry the load" for Ford as its units in Europe, Asia and South America find their footing and cement their market position, chief financial officer Bob Shanks said.
Operating margins in North America are unlikely to be as high in the fourth quarter due to higher spending in areas like engineering and advertising, Shanks said. Ford's margin on its automotive business overall was 6.3 per cent in the third quarter.
It is aiming for overall margins of between eight and 10 per cent by the middle of the decade.-Reuters