Ford Motor Company posted record North American sales that helped nearly double its third quarter profit. Strong sales of its F-150 pick-up truck more than offset profit declines in Europe and South America.
“The Ford team delivered an outstanding quarter — with record third quarter profit, best quarter ever for North America, higher wholesales, higher revenue, higher market share and improved margin,” Mark Fields, Ford CEO said during the earnings release.
Ford Rides the Auto Revival
Ford Motor Company ‘s results have come at a time when the auto sector is in the midst of an upturn. Easy credit has boosted consumer demand, helping push auto sales up 16 percent y-o-y in September, according to data from Reuters.
Ford has been negotiating new four-year agreements with the United Auto Workers. With sales at a decade high, auto workers have been demanding pay hikes and improvements in a compensation structure that was put in place when the sector was bleeding in the domestic market.
Rival General Motors, which has struck a tentative deal with UAW, also topped analyst estimates last week amid improved profit margins in China and growing demand for trucks in North America. GM sold 251,310 cars and trucks during September.
Ford Motor Company reported third-quarter adjusted earnings of 45 cents a share, up from 24 cents a share in the same period last year. Revenue also jumped to $35.80 billion from $32.80 billion a year ago.
Analysts polled by Thomson Reuters were expecting quarterly earnings of 46 cents a share on sales of $35.07 billion.
North America is the Only Silver Lining
Ford’s North American unit, riding on strong demand for trucks, hit a record operating profit of $2.7 billion. That was up sharply from the $1.4 billion in the year-ago period. The auto major recorded an operating margin for the region of 11.3 percent. That was slightly lower than the 11.8 percent reported by GM, but still at record highs.
Ford Motor Company ’s global market share came in at 7.6 percent, up three-tenths of a percent from a year earlier. But losses of $182 million in Europe and $163 million in South America disappointed some investors.
Like most other major automakers, Ford is relying on North American sales to stabilize operations. Demand in China is cooling. And other ‘high potential’ markets like Brazil and Russia are in total disarray. European volumes are on a rebound, but are still much below peak values.
After profits dropped last year, CEO Fields promised to boost pre-tax earnings by as much as 51 percent in 2015. That seems to be well on track.
“I have very high expectations for Ford for the second half of 2015,” Morningstar’s David Whiston said in Chicago. “This is the first test to see if they can deliver on what they promised.”