Ford profit edges up on lower tax rate
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News Mexico
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • Chinese, western consumers divided on electric, self-driving cars, survey finds
      Decline in ride hailing dents car sales, report says
      Nio launches another crossover
      Polestar
      Polestar 2 trial production begins at Geely plant
    • Four technologies that could take the world beyond lithium ion
      Many lessons learned -- and some underway -- on battery safety
      Leave room for lead?
      The 3 main types of lithium ion battery cells
    • Uber
      Uber reports 3,000 sexual assault claims last year in its safety review
      Toyota leads $50 million funding round for May Mobility
      Ford halts medical shuttle to test with AVs instead
      MB robotaxi web.jpg
      Daimler starts pilot testing of self-driving Mercedes taxis in the U.S.
    • Automotive News special report: Retail Realities
      2019 UAW-Detroit 3 negotiations: The path forward
      Dealerships owned by ex-NFL stars face collapse, litigation
      Want a luxury car? Try a Kia
    • Executives from some of the largest U.S. auto lenders debate the viability of 84-month car loans. From left, Ian Anderson of Westlake Financial Services, GM Financial’s Kyle Birch, Charles Bradley of Consumer Portfolio Services and Huntington Auto Finance’s Rich Porrello.
      Lenders differ on 84-month loans
      New to the U.S. landscape, a Mazda supplier commits large
      Kyle Shaules’ Civic rolled five times after he hit a puddle and hydroplaned.
      Honda shares crash survival stories
      Porsche aims to pair speedy Taycan with fast charging
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
      • Holden
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • PSA
      • Citroen
      • Opel
      • Peugeot
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Auto Shows
      • Detroit Auto Show
      • New York Auto Show
      • Los Angeles Auto Show
      • Chicago Auto Show
      • Geneva Auto Show
      • Paris Auto Show
      • Frankfurt Auto Show
      • Toronto Auto Show
      • Tokyo Auto Show
      • Shanghai Auto Show
      • Beijing Auto Show
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Alfa-Romeo-Stelvio- web.jpg
      Alfa Romeo could be Tavares' toughest turnaround
      Iacobelli
      Alphons Iacobelli: The bad penny that keeps turning up
      With Mach-E, Ford ensures Mustang badge will live on
      Autonomous
      A call for clarity on self-driving terminology
    • view gallery
      1 photos
      Polarizing Design
      view gallery
      1 photos
      Charging Ahead
      Roger Penske buys the Indianapolis Motor Speedway and IndyCar
      view gallery
      1 photos
      Pace Truck
      FCA-PSA
      view gallery
      1 photos
      Merger Of Equals: Pt 2
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • December 6, 2019 | All Stars will leave an imprint on the industry’s future
      November 29, 2019 | Plenty to be thankful for in the automotive industry
      November 22, 2019 | GM’s lawsuit against FCA is all about payback
      November 15, 2019 | Will anyone buy EVs?
    • German car jobs boom comes to screeching halt
      John Pye
      AV testing needs clear NHTSA guidelines
      Hackett's remedy for sticker shock
      Amit Rosenzweig
      AV industry needs teleoperation laws
    • EV taxis
      Beijing, unrelenting, steps up push for EV output
      Buick in China
      Global automakers raise bet on gasoline crossovers, SUVs in search of growth opportunities
      American brands, losing ground, face new challenges in China
      PSA, FCA must confront excess China capacity under merger
    • Uber case should prompt tighter AV controls
      Plan to clean up UAW corruption is a good start
      Shared benefits make FCA-PSA union worth risk
      GM, UAW should get credit for working out deal
    • Trabant has been reliable, mostly
      Cadillac needs to get its priorities straight
      Dealers can find out how to follow ADA
      Indeed, Penske did have another win
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: Uber discloses 3,000 claims of sexual assault in 2018
      AutoNews Now: UAW names Rory Gamble president
      AutoNews Now: UAW-FCA deal enhances profit sharing, health care
      AutoNews Now: PSA, FCA leaders discuss merger, friendship
    • First Shift: Tesla's China-made cars qualify for subsidies
      First Shift: LG Chem says it will build batteries with GM in Ohio
      First Shift: U.S. attorney wants 'more cooperation' from UAW in probe
      First Shift: VW faces more diesel litigation
    • Ford's Jim Hackett on Wall Street, the Mustang Mach-E and tech opportunities for dealers
      watch video
      9:13
      Women service staffers defy perceptions, boost customer satisfaction
      Tenn. dealer preaches profits, fixed ops longevity, workplace empathy
      Family, flexibility, fun crush employee turnover at No. 1 dealership
    • Why Carlos Tavares wants to merge PSA and FCA  
      Lincoln aims to 'paint a new picture' for shoppers
      VW's Scott Keogh on bringing 'cool' EVs to the masses
      How Toyota found its 'niche' in Mexico
  • EVENTS & AWARDS
    • Events
    • Awards
    • World Congress
    • Retail Forum: NADA
    • Canada Congress
    • Marketing 360: L.A.
    • Europe Congress
    • Retail Forum: Chicago
    • Leading Women Conference Detroit
    • Retail Forum: Toronto
    • Fixed Ops Journal Forum
    • 100 Leading Women
      • Submit a nomination for 2020
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealership To Work For
    • PACE Awards
    • PACEpilot
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • Publishing Partners
    • Classifieds
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Weekend Drive Podcasts
    • Ally: Do It Right
    • DealerSocket
    • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
    • Facebook: The road to a zero-friction future
    • Guide To Economic Development
    • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
MENU
Breadcrumb
  1. Home
  2. Automakers & Suppliers
July 26, 2017 01:00 AM

Ford profit edges up on lower tax rate

Michael Martinez
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    REUTERS
    Ford's second-quarter profit margin fell to 5.9 percent from 7.7 percent in the same period a year ago.

    DETROIT -- Foreign tax credits helped Ford Motor Co.'s second-quarter net income rise 3.7 percent to $2.04 billion, but the automaker reduced its pretax profit outlook for the rest of the year amid declining U.S. industry sales and rising steel prices.

    In CEO Jim Hackett's first earnings report, Ford profit margins, pretax earnings and market share all declined from the second quarter of 2016. CFO Bob Shanks said the company's pretax profit for 2017 will be "a little bit less" than the $9 billion it originally projected, although Ford boosted its earnings-per-share outlook because of a more favorable tax rate.

    “No one here is satisfied," Jim Hackett, who replaced Mark Fields on May 22, told analysts and reporters on a conference call Wednesday. "We all know we have a lot of work to do.”

    Ford said its tax rate in the second quarter dropped to just 10 percent, less than a third of the 32 percent rate it paid in all of 2016. That's because Ford, in anticipation of corporate tax-reform efforts by Congress and the Trump administration, chose to bring foreign tax credits onto its U.S. balance sheet now rather than later.

    First look

    The second-quarter results offer the first snapshot of the company's finances and operations inherited by Hackett, a former Ford director who headed the automaker's mobility efforts starting in 2016. He called the second quarter results a "solid performance," but said the automaker will likely make some changes once it concludes a 100-day review of operations in about a month.

    Ford shares closed down 1.9 percent to $11.06.

    Pretax profits fell 16 percent in the quarter to $2.51 billion because of higher steel costs, an unfavorable foreign-currency exchange rate and lower U.S. sales, among other factors. Revenue rose 0.9 percent to $39.85 billion.

    The automaker took a $248 million charge in the quarter to end production of the Focus compact car in South America, a decision made public for the first time Wednesday. A Ford spokesman declined to say when production would end. The move follows news that Ford will end Focus output in North America next year and begin importing the car from China in 2019.

    Recall charge

    Ford's profits also were hurt by a $142 million charge for a June recall of 402,462 Transit vans in North America for possible driveshaft separations.

    Ford's second-quarter profit margin of 5.9 percent was down from 7.7 percent a year ago, and well below the 10 percent margin that General Motors reported Tuesday in its second-quarter results. Ford's adjusted earnings were equal to 56 cents per share, up 4 cents from a year ago and topping analysts' estimates of 43 cents per share.

    Nearly all of Ford's profits were generated in North America. It generated a $2.2 billion pre-tax profit in the region, down 19 percent from the same period a year ago amid declining sales. Revenue, however, rose 3 percent after Ford sold a more profitable mix of vehicles.

    North America

    Its North American market share fell one-tenth of a percentage point due to lower fleet sales, mainly in the car segment.

    Also denting North American profits: $126 million in engineering expenses as Ford works on a plan to add 13 electrified vehicles and five new SUVs to its lineup by the end of the decade.

    Hackett said Ford expects its mix of vehicles will continue to help, as it introduces a midcycle update to its lucrative F-150 pickup later this year. Redesigned versions of the Expedition and Lincoln Navigator, due in showrooms this fall, will also boost profits.

    Ford earned $143 million in the Asia Pacific region, versus a small loss a year ago, driven by higher volumes in China.

    Hackett: "We have got to address the issues that come from Brexit."

    European profits

    Ford also was profitable in Europe, though its $88 million pre-tax profit there was 81 percent lower than a year ago. It was Ford's ninth consecutive quarterly profit in Europe, but the results were hampered by Great Britain's decision to leave the European Union and lower volume as Ford launched a redesigned Fiesta in the market. Ford said it expects profits will be down about $600 million this year because of Brexit.

    Ford lost $53 million in the Middle East and Africa and $185 million in South America. For the full year, Ford said it expects to lose less money in South America than in 2016.

    At Ford Credit, second-quarter pre-tax profit jumped 55 percent to $619 million. It was the credit arm's best quarter since 2011. Ford raised its guidance for Ford Credit to better than the $1.5 billion pre-tax profit it had projected, although it did not provide specifics.

    Ford also increased its earnings-per-share outlook for the total company, even though pretax profits are on track to decline.

    It previously said it expected to generate pre-tax profits of $9 billion in 2017, down from $10.4 billion in 2016 as it invests in "emerging opportunities" such as autonomous and electric vehicles. That translated to an adjusted earnings per share of $1.58 per share.

    Ford now says it will end the year with adjusted earnings per share of $1.65 to $1.85, based on expectations of a full-year tax rate of 15 percent.

    Related Articles
    Leasing vigilance helps Ford Credit's Q2 results
    For GM and Ford, home is where the profits are
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Digital Edition
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal - 10-21-19
    Read the issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Now

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    Automotive News
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
          • Holden
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • PSA
          • Citroen
          • Opel
          • Peugeot
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Auto Shows
          • Detroit Auto Show
          • New York Auto Show
          • Los Angeles Auto Show
          • Chicago Auto Show
          • Geneva Auto Show
          • Paris Auto Show
          • Frankfurt Auto Show
          • Toronto Auto Show
          • Tokyo Auto Show
          • Shanghai Auto Show
          • Beijing Auto Show
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • World Congress
        • Retail Forum: NADA
        • Canada Congress
        • Marketing 360: L.A.
        • Europe Congress
        • Retail Forum: Chicago
        • Leading Women Conference Detroit
        • Retail Forum: Toronto
        • Fixed Ops Journal Forum
      • Awards
        • 100 Leading Women
          • Submit a nomination for 2020
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealership To Work For
        • PACE Awards
        • PACEpilot
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Weekend Drive Podcasts
      • Webinars
      • Publishing Partners
        • Ally: Do It Right
        • DealerSocket
        • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
        • Facebook: The road to a zero-friction future
        • Guide To Economic Development
        • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
      • Classifieds
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds