Ford's Profit Falls on Recall Costs
October 27 2016 - 6:39AM
Dow Jones News
By Christina Rogers
Ford Motor Co.'s net income fell 56% in the third quarter as
hefty safety-recall expenses and softer sales in the auto maker's
core U.S. market dinged profits in North America, offsetting
improving results in China and Europe.
Ford on Thursday reported net income of nearly $1 billion for
the period ended Sept. 30, down from $2.2 billion recorded in the
same year-ago period when the company, benefiting from the rollout
a redesigned F-150 pickup truck, delivered a record third-quarter
result.
The Dearborn, Mich., auto maker said operating profit equaled 26
cents a share, solidly beating analysts' expectations of 20 cents a
share as recall expenses and marketing costs were lower than
anticipated. The results were hit by a $600 million expense booked
during the quarter related to an expanded door-latch recall.
Revenue declined 6% to $35.9 billion, with global deliveries
down slightly, including lower sales in the U.S. The company said
it had $2 billion in cash outflows in the third quarter, and plans
to post positive cash flow in the fourth quarter.
Ford reaffirmed full-year 2016 guidance of $10.2 billion
adjusted pretax profit. The auto maker plans to further trim
production in the fourth quarter to deal with softer U.S.
volumes.
Margins slipped significantly in the company's core North
American operation due to the recall, launch costs and other
factors.
Write to Christina Rogers at christina.rogers@wsj.com
(END) Dow Jones Newswires
October 27, 2016 07:24 ET (11:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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