Ford posts $1.6 billion net income in third quarter

[News_Editor]

Ford posts $1.6 billion net income in third quarter

2011-10-26 21:54:55 GMT+7 (ICT)

DEARBORN, MICHIGAN (BNO NEWS) -- Ford Motor Company on Wednesday reported a net income of $1.6 billion, or 41 cents per share, for the third quarter of 2011. It represents a decrease of $38 million compared to the same period one year ago.

Despite the year-to-year decrease, Ford reported a 14 percent increase in sales during the July-September period, compared to last year's numbers, to $33.1 billion, surpassing expectations with an increase of $4.1 billion compared to the third quarter 2010. Ford also generated a positive Automotive operating-related cash flow of $400 million in the third quarter. In addition, it increased its sales volume by more than 30 percent in Russia.

With continued growth in volume and revenue, for the first nine months, Ford earned a pre-tax operating profit of $7.7 billion, net income of $6.6 billion and reported Automotive operating-related cash flow of $4.9 billion.

Due to the significant decline in commodity prices near the end of September, pre-tax operating profit was reduced by about $350 million for unrealized mark-to-market adjustments on commodity hedges for future periods within Automotive results.

However, Ford said the charge was a non-cash charge and would either reverse should commodity prices increase or be offset by the benefit of lower commodity prices in the future.

"We delivered solid results for the third quarter despite an uncertain business environment by continuing to serve our customers around the world with best-in-class vehicles," said Alan Mulally, Ford president and CEO. "We accomplished this while continuing to invest for future growth and focusing on developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value."

Unfavorable special items such as personnel reduction actions, Mercury and other dealer-related actions in North America affected the company's third quarter net income by $98 million, Ford said, adding that its pre-tax operating profit during that period was $581 million, a decrease of $185 million from the third quarter of 2010, consistent with previous guidance.

According to the report, Ford's third quarter total Automotive pre-tax profit was $1.3 billion, an increase of $45 million from the same period a year ago, although its third quarter 2011 pre-tax operating profit was $1.9 billion, or 46 cents per share, which is a decrease of $111 million, or 2 cents per share, from third quarter 2010.

North America and South America reported pre-tax profits for the third quarter, while Europe, the Asia-Pacific region and Africa posted a loss for the period.

"We remain well on track to deliver improved full year pre-tax operating profit and Automotive operating-related cash flow, consistent with our guidance," said Lewis Booth, Ford executive vice president and chief financial officer. "Our liquidity remains strong, and we will continue to take actions when appropriate to strengthen our balance sheet."

Ford Motor Co. shares were down 6.92 percent on late Wednesday morning.

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