Ford Posts Third Quarter 2014 Pre-Tax Profit of $1.2 Billion*; Net Income of $835 Million; Global Product Launches on Track, Including F-150
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DEARBORN, MI -- October 24, 2014:
- Third quarter pre-tax profit of $1.2 billion, a decrease of $1.4 billion compared with a year ago; after-tax earnings per share of 24 cents, excluding special items; 21st consecutive profitable quarter
- Net income of $835 million, or 21 cents per share, a decrease of $437 million compared with a year ago; net income includes pre-tax special item charges of $160 million, largely to support European transformation plan
- Wholesale volume and company revenue declined year-over-year by 3 percent and 2 percent, respectively; market share higher in Europe and record third quarter market share in Asia Pacific; record market share in China
- North America and Asia Pacific profitable
- Strong results at Ford Credit — better than a year ago
- Automotive operating-related cash flow negative $700 million; Automotive gross cash of $22.8 billion at end of third quarter exceeded debt by $7.9 billion
- Unprecedented cadence of new products continues — all launches on track, including the all-new F-150
- Guidance unchanged from the company’s Sept. 29 Investor Day, including 2014 pre-tax profit guidance of about $6 billion, excluding special items, and strong growth and financial performance in 2015
The company’s pre-tax profit, excluding special items, was $1.4 billion lower than a year ago. This is more than explained by three factors — lower volume, higher warranty costs and adverse balance sheet exchange effects.
After-tax earnings per share were 24 cents, excluding special items, 21 cents lower than a year ago.
Net income for the quarter was $835 million, or 21 cents per share, a decrease of $437 million, or 10 cents, from a year ago. Net income included pre-tax special item charges of $160 million for separation-related actions, primarily to support Ford’s European transformation plan.
Third quarter wholesale volume and company revenue declined year-over-year by 3 percent and 2 percent, respectively. Market share was higher in Europe, and the company reported record third quarter market share in Asia Pacific with record market share in China for any quarter.
North America and Asia Pacific were profitable, but pre-tax results were lower than a year ago for all of Ford’s Automotive business units except Middle East & Africa. Ford Credit delivered strong results that were better than a year ago.
Ford’s full-year outlook for company pre-tax profit is unchanged at about $6 billion, excluding special items, as it continues its aggressive implementation of its One Ford plan.
“During the third quarter, we continued to introduce an unprecedented number of new vehicles and invest heavily in the new products and technologies that will deliver strong profitable growth beginning next year,” said Mark Fields, president and CEO. “We also addressed business challenges head-on using our proven One Ford plan. Everyone at Ford remains focused on accelerating our pace of progress, while delivering product excellence and innovation in every part of our business.”
Ford’s Automotive operating-related cash flow was negative $700 million in the third quarter. This is more than explained by unfavorable changes in working capital, including the effects of the five weeks of downtime in the quarter at the Dearborn Truck Plant as the company transitions to the all-new F-150, as well as supplier parts shortages. In the fourth quarter, working capital changes are expected to be positive. The company ended the third quarter with Automotive gross cash of $22.8 billion, exceeding debt by $7.9 billion, with Automotive liquidity of $33.6 billion.
In the third quarter, Ford declared a dividend of $0.125 per share on the company’s outstanding Class B and common stock and paid about $500 million in dividends. Ford also completed the previously announced share repurchase program.
Ford’s third quarter operating effective tax rate was 31 percent. The company continues to expect its full-year operating effective tax rate to be about 35 percent.
