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.