Troubles in Ford Motor Co.'s home market, including a massive recall and the difficult launch of new heavy-duty pickups, are hurting the company's bottom line.
Ford said today its net income plunged 56 percent to USD 957 million in the third quarter, down from USD 2.2 billion in the July-September period a year ago.
The earnings, of 24 cents per share, compared to earnings of 55 cents per share in the July-September period a year ago.
Adjusted earnings of 26 cents per share, which exclude one-time items, beat Wall Street's forecast of 20 cents, according to analysts polled by FactSet.
North America, with its record-setting US sales and love affair with profitable SUVs and pickups, has been Ford's cash cow in recent years.
But as US sales peak, Ford is feeling the effects. Ford's North American sales were down 11 per cent in the quarter, and revenue dropped 8 per cent. The company has already announced temporary closures of four North American plants this month to bring production in line with demand.
"What's happening to the company is really about what's happening in North America," Ford Chief Financial Officer Bob Shanks said.
And it's likely to keep happening. Ford has said it still expects a full-year pretax profit of USD 10.2 billion, but that's down from its initial forecast of USD 10.8 billion because of the recall. Ford has said its profits will likely fall next year before rebounding in 2018.
Ford's shares fell 21 cents, or 1.8 per cent, to USD 11.67 in morning trading. Its shares are down almost 22 percent over the past year.
Dearborn, Michigan-based Ford had some big one-time costs in the third quarter. The company spent USD 600 million - USD 40 million less than it initially projected, to replace faulty door latches on 2.4 million cars and trucks. It is also launching its first all-new Super Duty pickup in 18 years, with all-aluminum sides that required a complete revamp of its Kentucky truck plan.
Ford's overall revenue fell 6 per cent to USD 35.9 billion. Automotive revenue was USD 33.3 billion, which matched Wall Street's expectations.
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