By on July 24, 2013
'Good job, Al", "Thanks Bill"

‘Good job, Al’, ‘Thanks Bill’

For the 16th consecutive quarter, Ford Motor Co. profits have risen, with the Dearborn automaker reporting a 2nd quarter 2013 profit of $1.23 billion, up 18.6% from 2012, working out to 45¢ per share, exceeding analysts’ projections of 37 cents a share. Pretax profit for the quarter was up 40% to $2.56 billion. The company said that it set records for pre-tax profits in both the 2nd quarter and 1st half of 2013, making $4.8 billion in the first six months of the year.

Ford CEO Alan Mulally attributed the company’s success to his One Ford plan. “Our strong second quarter results in every region around the world is another proof point that our One Ford plan is continuing to deliver and is building momentum.”

After losing over $30 billion from 2006 to 2008 as the American car industry melted down, Ford will have its fifth profitable year in a row.

Revenue was also up, 14.4% to $38.1 billion. The good quarterly results caused Ford to raise predictions for the full year. FoMoCo expects now to make more than the $8 billion it made last year and anticipates that the U.S. car and light truck market will surpass 15.5 million units, perhaps even reaching 16 million. Sales were also good in the 2nd quarter, up 15%, gaining Ford nearly 1% additional market share in the U.S. Average transaction prices were also up, ~$1,400 a vehicle, and Ford’s profit margin in the North American market of 10.4% leads all major manufacturers. The only negative part of Ford’s report was that incentives were up by $500 a vehicle, more than the industry average.

North America still remains the engine driving Ford’s profits, with the company reporting a $2.3 billion profit in that region. Europe, where car sales are the lowest they’ve been in two decades, dragged down global profits, but Ford CFO Bob Shanks said that the region is improving earlier than expected. Ford lost $348 million in Europe during the 2nd quarter, an improvement of over $50 million, and it also revised its 2013 projections for Europe, expecting loses to match last year’s $1.8 billion of red ink, instead of the $2 billion previously projected. Ford is restructuring its European operations and reducing overcapacity with three plants slated to close by early 2014.

News was better from the combined Asia Pacific Africa operations which reported record quarterly profits for the region of $177 million, a turnaround from a $66 million loss last year. South America also did well for Ford, posting $151 million in profits.

Get the latest TTAC e-Newsletter!

37 Comments on “Ford Posts Record Q2 Profits, Up Almost 19%, Surpasses Expectations, All Regions Profitable Except Europe...”


  • avatar
    Summicron

    “Europe, where car sales are the lowest they’ve been in two decades..”

    What made them improve after that last bottoming-out? Can it happen again?

  • avatar
    Austin Greene

    Now if they can get the Lions winning again.

  • avatar
    Beerboy12

    Good for them! Perhaps they will invest some of that with Lincoln quality issues, and, hopefully some back into their home town…

    • 0 avatar
      highdesertcat

      I agree! It is welcome news to see Ford doing so well since it is the one and ONLY remaining US car maker still standing.

      But as far as the Lincoln brand is concerned, I recommend it go the way of Mercury. And I say this as a former Lincoln Towncar owner and as a former F150 owner.

      • 0 avatar
        Kyree S. Williams

        It’s good to hear that Ford is making such profits. But the fact that Chrysler Group is owned by an overseas company does not mean it is no longer American. After all, Lamborghini is still Italian despite being a subsidiary of Audi AG, which itself is almost a complete subsidiary of Volkswagen AG. And last I heard, General Motors was still standing, bailout or no bailout. Rivalries aside (because I *am* a GM fan) the American auto industry as a whole seems to be steadily rising.

        • 0 avatar
          highdesertcat

          Kyree, people are free to believe what they want to believe.

          I bought a 2012 Grand Cherokee Overland Summit for my wife a while back but I have no pretenses that Chrysler is an American-owned or American-run automaker. Yeah, they build cars in Auburn Hills but the plays are called by Fiat.

          Chrysler now is just like Toyota, Honda, Nissan, Mercedes, BMW, Hyundai, et al: a foreign-owned automaker providing much-needed jobs to Americans, building cars for Americans, right here in America. I think it’s great! But the profits go elsewhere.

          Ford is a remarkable success story on its own since Alan Mulally assumed the helm, and they did it without overt bailouts, although Ford did receive a ton of cash from the DOE for “retooling”, but no official bailout. Money is fungible and I’m sure Ford fungibled that money throughout the various departments.

          GM died. No two ways about that. The death and bailout of GM is a factoid of automotive history in America.

          Ironically, America did not do for other failed auto companies what it selectively did for GM, because of the UAW.

          And if the taxpayers are happy with that, they should buy more GM products.

          But my perception is that since only 64% of the US work force chooses to work and pay taxes, it also means that 36% choose not to work and not to pay taxes, but instead, live off the freebies the other 64% are paying for.

          Now there’s a deal for ‘ya!

          • 0 avatar
            Summicron

            “Now there’s a deal for ‘ya!”

            If you want a grandson with a dog collar.

          • 0 avatar
            Onus

            I’m not going to argue the politics side.

            But, one thing. Chrysler’s cash at the current time is its own and its sitting on a ton of it. FIAT does not have access to its cash untill it buys the remaining parts.

          • 0 avatar
            rnc

            “although Ford did receive a ton of cash from the DOE for “retooling”, but no official bailout. Money is fungible”, that money was so un-fungible the DOE couldn’t give away all of it, having to put $2 of your free cash into reserve for every $1 withdrawn from the DOE line, for a very narrow scope, you had to have $2 to reserve with, while being able to pay back the $1, the ones who couldn’t quickly died from that fungus

            *(allowing ford to change FMC to an “Industrial Bank” and allowing it to access the fed window would have qualified as a bailout, that request was denied)

          • 0 avatar
            highdesertcat

            Summicron,

            haven’t you heard that the ‘new’ national policy of America is to bailout/nationalize all 12+ million “illegal” aliens in the US, grant them amnesty, force them on a path to citizenship even if they don’t want to become American citizens, and then hope that they will pay taxes should they be employed in the future, so as to increase revenue to the Treasury.

            A lofty goal, indeed!

            But with money for nothing and foodstamps for free, why would anyone in their right mind want to break sweat working?

            Right now the participation rate of the US labor force is only 64%. Imagine if it was closer to 100%, like 80-85%. Hell, we could deport all the illegal aliens and still be better off bringing in LEGAL immigrants.

            But then the Democrats would lose a huge portion of their voting base………

      • 0 avatar
        tikki50

        Last I checked GM was American. Matter of Fact I would argue it’s More American than Ford. Of course I’m sure you’ll mention the bailout which sorry that doesn’t make it less American.

    • 0 avatar
      gslippy

      @Beerboy12: Ford’s investment in their home town is the employment of its citizens and payment of due taxes. It has no obligation to bail out Detroit, but it should think seriously on what to do about Lincoln.

      • 0 avatar
        Beerboy12

        I am aware that they are not obliged to and I did not intend to imply that. Often, and this is purely at the Business’s discretion, a business will make investments into the town or city they are based in. I believe it ultimately benefits the business.
        If Ford does choose to help Detroit, I believe that act would sit comfortably with tax payers who paid for Ford’s bailout. A return favor, if you like.
        My hopes would be that Ford take a broader approach than a simple bail out.

  • avatar
    J.Emerson

    all furds r junk egoboost is terrible my mom’s cousin’s brother owned a dodge shadow turbo once and it was garbage so all turbos are bad and they will all blow up in 3 years look at the cr rankings all furds are junk because 60 year olds cant make touchscreens work anything with more technology than my 92 tercel is a rolling scrapheap and totally fail alan mullaly is a doodoohead and one ford is totally fail all furd customers are retards who should have just bought a superior japanese car IM NOT MAD

  • avatar
    JD321

    Keep stroking them there $50K checks fer them there F150s.
    90% of Ford profit is truck/SUV sales.

    • 0 avatar
      J.Emerson

      [citation needed]

      This has become quite the meme as of late but I haven’t seen any actual evidence of it yet.

      • 0 avatar
        danio3834

        Maybe if the hecklers did some research before posting…

        “The F-series trucks and SUV derivatives such as the Expedition account for more than 90 percent of Ford’s global profit, according to Morgan Stanley.”

        http://www.cnbc.com/id/100900410

        • 0 avatar
          rnc

          According to Morgan Stanley everything was GREAT a few years back, just before it wasn’t anymore, allowing investment banks that are investing thier own monies for profit against the same people they are supposed to be investing for, give general investment advice? S&P and Moody’s have some great advice for you too.

      • 0 avatar
        bball40dtw

        There are never really good hard numbers, directly from Ford, on the percentage of total profit directly from the F-series. I would say it is a significant number, no matter how you slice it. Plenty of investment firms and analysts put the number at 90% or higher though.

        Analysts tend to say that Ford makes an average of $10,000 in profit for every F-series that is sold. In Q2, Ford sold 198,000 F-series trucks. That is basically $2 billion in profit. North America had a $2.3 billion profit. Based on the math, F-series makes up 87% of Ford’s North American profit.

        I know thats a bit simplistic and assumes analysts are correct in their F-series profit figures. However, we can all agree that Ford profits are more a function of US truck sales more than any other manufacturer. With the F-series being the most profitable vehicle in the industry’s history, it isn’t suprising.

  • avatar
    thornmark

    The last guy who turned Ford around:

    RIP
    Philip Caldwell (January 27, 1920 – July 10, 2013) was the first person to run the Ford Motor Company who was not a member of the Ford family, orchestrated one of the most dramatically successful turnarounds in business history….As Chairman of the Board and CEO Caldwell approved and oversaw the development and launch of the Ford Taurus (and its corporate sister the Mercury Sable) which were introduced to the media days before his retirement,[6] thus allowing him to take public credit for the Taurus program, which became one of the biggest successes in automobile business history.
    http://en.wikipedia.org/wiki/Philip_Caldwell

    Caldwell died recently in my home town. The Ford dealership closed there a few years ago, no one would buy it.

  • avatar
    RobertRyan

    Ford Australia is in the pits and I would say will stay that way.If “success” is making a $1.8 billion dollar loss instead of $2 Billion one, then it is a strange yardstick. VW still makes profits in the down European market, but Ford and GM are having a hard time stemming loses.
    90% of Ford’s profit come from the selling of the F series Pickups in North America, not really a balanced product mix.

  • avatar
    Big Al from Oz

    It’s good to see Ford make a profit.

    Alan Mulally stated the Ford one plan is working. The only markets that have the Ford one plan are essentially the UNECE markets.

    The US has it’s own version of a one plan with the F trucks that are making the profit in the US/Canadian market.

    So how successful is the one plan. Or is Ford Dearborn (read USA) under different rules? So this shows that Ford would be struggling like everyone else if the US didn’t have a very insular and protected market for its CUVs/SUVs/Pickup/Commercial vehicles.

    This is showing that the Ford is unfairly gaining market share through tariff and barrier protection.

  • avatar
    hoff02

    I love TTAC and the B&B, but it just never ceases to amaze me how the anouncement of what should be good news for an American car company (and in general the American economy as a result) seems to bring out the inner trolls. The confusion over what is One Ford seems like such a common hitting point that its almost dumbfounding. Whatever you want to call it or deride it for, can there seriously be no acceptance that Ford has finally some mojo in their strategy and its working? Could it be that deriding vehicle reliability over slow or less-than-inuitive touchscreen software actually means less to the general consumer than CR statistics show? NA is obviously impacted by the greater than expected return of truck and SUV sales – that’s true. But Ford has obviously mananged to plan accordingly and ride that wave successfully. If transaction margins are up, sales numbers are better than expected, and record profits are being recorded – all the bemoaning over why its “just gotta be fraudulent” is just downright ludicrous. Now if we see the sales of SUVs/trucks taper off and Ford falls flat on their face, I could see the cause for deriding this momentary success, but for the moment can there be no general happiness over the stroke of good fortune for one of the D-3?

    • 0 avatar
      Big Al from Oz

      Ford is also instrumental in shaping (protecting) the US market. I’m no Ford fan, but I sort of own one.

      Like I stated its good to see Ford make a profit. But where is most of that profit coming from? What platform is the largest generator of that profit? Is this US platform protected? How big would Ford’s profit be if there was fair competition and ALL markets were to Ford’s One Plan.

      If the US market (and others) removed the tariffs and protection the manufacturers that can compete will survive, and if Ford can survive then its worth keeping.

      Like I stated, UNECE algined or compliant markets will have Ford One Plan. Why are they killing the Australian manufacturing? Does the Falcon fit into the Ford One Plan. Ah, we don’t protect like other markets.

      I mean all Fords in the US are different to all of the UNECE vehicles (different design regs/EPA/CAFE etc). I that a One Plan?

      • 0 avatar
        hoff02

        BAFO – I actually fully agree that the Chicken Tax and tariffs the US has in place ulimately serve to hinder the US auto makers from achieving their potentials in innovation and competitive designs. Sheltering a company is never a strong long-term plan and I’m not trying to argue that point. You seem to want to poke holes in the success stemming from the source of these profits and I guess I can see your skepticism. It is true that recently a Morgan Stanley analyst indicated that in 2012 90% of Ford’s global profits stem from their F-Series sales. If you read that same report you’ll see that GM is also inordinately high with 67% of their global profits coming from their truck and commercial platforms. What does this mean? It means in 2012 trucks basically served as the cornerstone for some strong returns for those two automakers – but that analysis does not inherently mean what is being seen so far in 2013 is a direct copy of that success. I don’t doubt that F-Series sales remain a high contributor – but all that means is that Ford has managed to correctly capitalize on this demand in one of the top markets in the world. Will that be sufficient for long-term growth and development – almost certainly not. But the current cycle of products does show Ford is seeking to improve and there are signs they are succeeding. As for the Aussie market, there are many factors as to why the Falcon has to die. The market is not as “protected” is certainly a contributor, but I think if you really get to the heart of it, Ford has simply failed to provide products that the Aussie consumers desire enmasse. There’s a lot going on right now with that market and I don’t think extrapolating that failure on the whole of the Ford plan is exactly fair. As for your criticisms of One Ford – we can agree to disagree on what the definition of that plan is. One Ford, in my mind, was about platform sharing and design sharing and never about carbon copy vehicles sold around the world. Someday we may see that, and it sounds like Ford would be find with global standardization – but we can agree that its not ready to happen just yet.

        • 0 avatar
          hoff02

          Additionally, you seem to really dislike that the profit center stems from the platform that is truly the most protected. I agree with you in premise that is assuredly the most protected segment and it is dangerous to say that Ford can survivie forever on that strategy. I don’t believe they can either. But for the time being – that segment is what it is – a huge win for the company. If they can smartly take their profits from this windfall to continue to improve their other offerings for innovation and growth (please fix Lincoln?), then they are doing the right thing. You can choose to deride this windfall as somehow unfair – but the world isn’t about fair and never will be. The policies will change in time and if Ford survives it, then all the better for them. However, somehow pointing all this out as fraudulent and somehow ultimately a negative is based on a premise of future failure. Is Ford perfect – hell no. Have they turned a profit 6 quarters in a row? Yes. Try to at least enjoy the little victories for companies not-too-long ago on the brink of collapse.

          • 0 avatar
            Big Al from Oz

            hoffo2
            What I’m more or less saying is Alan Mulally is lying through his teeth about Ford One Plan or it’s really 1.5 plan.

            If it was working the F Series shouldn’t be supporting FoMoCo. It’s global operations, ie other vehicles should be the bread winners.

            This profit isn’t sustainable like you mentioned and the US model has to be turned around quickly for the US manufacturers to survive in the longer term, not the 2025 plan.

            The US government has to say to all involved enough is enough, you are costing the country to much money. I mean it’s the US paying to keep Ford alive not us, we are probably running at a loss in Australia like the Euro Region.

  • avatar
    NN

    Big Al/hoff02,

    It’s important to keep in mind that One Ford is an extremely long-term process. One Ford is really only getting underway now in Asia, and I expect profits from that region are going to grow tremendously. The EcoSport was just launched in India and has waiting lines for it, it is also a big success in Brazil. The Focus was the most popular car in China in 2012, and this year they are just launching the Ecosport, Escape, and new Mondeo/Fusion, which is anxiously awaited there: http://www.carnewschina.com/2013/07/25/new-ford-mondeo-will-hit-the-china-car-market-in-august/

    The new Fiesta is doing very well in Europe and Brazil. Europe doesn’t have the new Mondeo or EcoSport yet. So even though it’s true the F150 is overweight right now on overall margins, I expect the global benefits to One Ford are really just starting to show…until now it’s been a lot of investment and planning. The products are now finally just getting out there, and it seems once they do almost every single model is a hit

  • avatar
    romismak

    Ford is right now growing basically everywhere. Their passenger car JV in China is booming, in NA they are gaining market share, yes F-series are by far most important contributor to profit, but also they have new good cars. Even in South America and Europe it isn´t so bad, i mean Europe is just in horrible times, but Ford deliveries were up comparing to last year, it is just matter of time and they will stop loosing in Europe, while gaining much more in Asia in years.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India