Ford posts Q3 loss in Europe, hurt by Brexit
DETROIT -- Ford Motor posted a third-quarter loss in Europe even as its net income rose 63 percent to $1.6 billion, helped by foreign tax credits and strong light-truck sales in North America.
Ford's revenue, pretax profit and operating margin all increased in what Chief Financial Officer Bob Shanks called a more balanced performance than recent quarters. Ford's adjusted pre-tax profit climbed 40 percent from a year ago to $2 billion, while revenue inched up 1 percent to $36.5 billion.
Its earnings were equivalent to 39 cents per share, 6 cents better than analysts' estimates in Jim Hackett's first full quarter as the company's CEO.
"This quarter demonstrates that our team's focus on fitness is showing early promise," Hackett said in a statement on Thursday. "But we also know that we must accelerate that progress in the near term."
Ford's profits were driven by North America, where it made a $1.7 billion pretax profit, up 31 percent from the same period in 2016. Its profit margin in the region jumped to 8.1 percent from 5.8 percent a year earlier.
Ford attributed an $86 million loss in Europe to the UK's vote to leave the European Union and costs related to launching a redesigned Fiesta subcompact hatchback. The company posted a $138 million profit in the region in the same quarter last year.
Ford said its European operations will return to profitability in the fourth quarter, helped by lower engineering, advertising and promotion expenses. The region will be in profit for the full year, CFO Shanks said.
Ford lost $158 million in South America and $60 million in its Middle East and Africa region.
But it posted a record third-quarter pretax profit of $289 million in Asia Pacific, more than double that of a year ago.
Ford Credit contributed $600 million in profits.
The automaker said it expects full-year earnings to come in between $1.75 and $1.85 per share. It had previously given a wider window of $1.65 to $1.85 per share.
Ford, in anticipation of corporate tax-reform efforts by Congress and President Donald Trump, brought $266 million in foreign tax credits back onto its U.S. balance sheet, continuing a planning practice it started in the second quarter.
Reuters contributed to this report