Ford confounds the forecasts over profits

CAR giant Ford yesterday posted a third-quarter profit that trounced Wall Street forecasts due to higher vehicle prices and record-high profit margins of 12 per cent in North America.

The number two US automaker posted an operating profit of $2.2bn, or 40 cents per share, beating the average estimate of 30 cents per share, according to Thomson Reuters.

Worldwide, Ford earned $800m more in pricing than it did last year. Half of the pricing increase came from North America, where Ford earned more than $2bn and posted margins over 10 per cent for the third quarter in a row.

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“To me, the story isn’t just the results in the quarter, but the consistency of the results,” chief financial officer Bob Shanks said.

Ford’s strength in North America has offset a sharp downturn in Europe, where Ford lost $468m in the quarter, and its lagging position in growth markets in Asia, especially China.

Ford expects US auto sales will be 14.7m this year.

In the third quarter, Ford earned about $2.3bn in North America. Contribution costs, which includes the cost of commodity hedging, fell by $500m in the market.

Ford’s third quarter revenue fell 3 per cent to $32.1bn, better than the $30.9bn expected by analysts. Net income in the quarter was about $1bn, or 41 cents a share, on a par with results from last year.

Ford has plans to close its Transit van factory in Southampton and another site in Essex with the loss of around 1,400 jobs.

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