Ford’s turnaround continues

Ford announced a $2.6 billion pretax profit, a record for the third quarter.
Joe Raedle/Getty Images
Ford announced a $2.6 billion pretax profit, a record for the third quarter.

DEARBORN, Mich. — Ford Motor Co. said Thursday that its net income fell 22 percent in the third quarter, to $1.27 billion, as the company took special charges related to restructuring its European operations and its US pension obligations.

Still, the country’s second-biggest automaker beat analysts’ expectations by setting a record for third-quarter pretax profit of $2.6 billion, up $426 million, a performance that led Ford to raise its profit forecast for the year.

It was the company’s 17th consecutive profitable quarter.


The $498 million in special items included $250 million for charges related to plant closures in Europe and $145 million as part of Ford’s voluntary lump-sum pension payout program for salaried retirees in the United States.

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“It was a really, really great quarter,” said Bob Shanks, Ford’s chief financial officer. The company’s performance was “encouraging from a number of perspectives,” with growth in wholesale volume, revenue, and market share in North America, South America, Europe, and Asia-Pacific.

The automaker posted a combined profit for regions outside of North America for the first time since the second quarter in 2011. A $159 million pretax operating profit in South America beat Wall Street’s expectations, while a $126 million profit in Asia-Pacific, though a third-quarter record for the company, came in below an analyst consensus.

Ford’s market share in South America, where Shanks said inflation in Venezuela and Argentina could pose a problem, grew more than a full percentage point to 9.5 percent.

Ford now expects to record a total company pretax profit and automotive-related operating margin higher than last year. Previously, the company had said it expected its performance to be on a par with 2012.


However, the fiscal standoff in Washington and the deferment of a long-term decision on the federal budget until early next year sent consumer confidence downward this month, Shanks said.

Overall, Ford has changed course from the days when Alan R. Mulally, the chief executive, mortgaged the automaker’s assets to borrow more than $23 billion in a last-ditch effort to avoid bankruptcy, analysts said.