Ford reports $1.3 billion net profit for April-June quarter
25 Jul 2014
Ford Motor Company, America's second largest vehicle maker, today reported a second quarter 2014 net income of $1.3 billion, or 32 cents per share, an increase of $78 million, or 2 cents, from a year ago.
Pre-tax profit for the quarter stood at $2.6 billion, its 20th consecutive profitable quarter and its best since second quarter 2011. The pre-tax profit of $2.6 billion, excluding special items, was $44 million higher than a year ago.
After-tax earnings per share were 40 cents, excluding special items, 5 cents below a year ago.
Net income included pre-tax special item charges of $481 million. These include the impairment of Ford's equity investment in the Ford Sollers joint venture in Russia, reflecting the present outlook for the business, including a weaker ruble, lower industry volume and industry segmentation changes that negatively impact sales of Focus. Also included in special item charges are separation-related actions, primarily in Europe to support Ford's transformation plan.
The company also affirmed its full-year pre-tax profit guidance of $7 billion to $8 billion as it continues to implement its One Ford plan to deliver profitable growth for all.
Ford said rising sales in China and Europe helped it to offset the negative effects of a currency crisis in Venezuela, as well as higher taxes and increased costs to introduce 23 new models worldwide this year.
Ford sales in China soared 35 per cent in the year's first half to a record 549,256 vehicles, while deliveries rose 6.6 per cent in Europe, which is recovering from a deep recession.
Ford expects profits to decline this year as it spends to roll out new models such as the aluminum-bodied F-150 pickup, its top seller.
''This was a very strong quarter for Ford, our strongest quarter since the second quarter of 2011,'' Chief Financial Officer Bob Shanks told reporters this morning at the automaker's Dearborn, Michigan, headquarters. ''Europe was a great, great outcome. It clearly shows the transformation plan is working and we're clearly on the way to a profit in 2015.''
Chief executive Mark Fields, who took over on 1 July when Alan Mulally, 68, retired, said he'll continue his predecessor's policies, such as globalising products and focusing on fuel-efficiency.
Ford earned $42.3 billion in the last five years after losing $30.1 billion from 2006 to 2008.
Ford also declared a dividend of $0.125 per share on the company's outstanding Class B and common stock and paid about $500 million in dividends during the April-June 2014 quarter. This is the same level of dividend paid in the first quarter, and a 25 per cent increase from the level of quarterly dividends paid in 2013.
Ford is currently implementing the previously announced share repurchase program for up to 116 million shares, or almost $2 billion, to offset an up to 3 per cent dilutive effect of potential convertible debt conversions and stock-based compensation.
