Ford’s 1Q net income falls on strong dollar, lower sales
DEARBORN, Mich. (AP) – Ford’s net income fell in the first quarter, hurt by lower sales of key vehicles like the F-150 pickup and a stronger U.S. dollar.
But the Dearborn automaker says the picture should improve as the year progresses, and it’s still aiming for a full-year pretax profit of $8.5 to $9.5 billion, up from $6.3 billion in 2014.
“We feel we are very much on track to that breakthrough year we talked about,” Chief Financial Officer Bob Shanks said Tuesday.
Ford’s net income fell 6.6 percent to $924 million in the January-March period. First-quarter earnings of 23 cents per share compared with earnings of 25 cents per share in the same quarter a year ago.
The results fell short of Wall Street’s expectations. Analysts surveyed by FactSet forecast earnings of 26 cents per share.
One reason for the miss: Analysts forecast a tax rate of 29 percent for the quarter, but Ford’s actual rate was 34 percent. That difference was worth about 2 cents per share, the company said.
Revenue fell by 5 percent, or $2 billion, to $33.9 billion. That also fell short of forecasts of $34.3 billion.
Ford shares dropped 5 cents to $15.86 in midday trading.
Shanks said 70 percent of the drop in revenue – or around $1.4 billion – was related to the strong U.S. currency. The dollar has climbed 8 percent so far this year against the euro and other major currencies. Last week, General Motors Co. said that currency exchange cost it $1.8 billion in first-quarter revenue.
Ford’s global sales fell 1 percent to 1.6 million. Sales rose in Asia and Europe but fell in North America, South America and the Middle East and Africa.
Ford said the continuing launch of its new F-150 pickup, which went on sale late last year, hurt North American sales because dealers don’t yet have a full inventory. Two plants make the F-150, in Michigan and Missouri, but only the Michigan plant was fully operational in the first quarter after a longer than usual changeover to make the truck’s body out of aluminum instead of steel.