Ford Quarterly Profit Plunges 46%

Ford Motor Co. reports that net income fell to $1.4 billion (€1.1 billion) in the first quarter of this year from $2.6 billion (€2 billion) in the same period of 2011. Revenue dipped 2% to $32.4 billion (€24.5 billion) as sales slid 3% to 1.4 million vehicles.

Ford says sharply higher taxes contributed half the earnings decline. Losses in Europe and Asia accounted for much of the rest. Pretax operating profit dropped 19% to $2.3 billion (€1.7 billion).

The January-March period was the company's 12th consecutive profitable quarter. Analysts were encouraged because Ford's results were better than expected.

Losses in Europe were less severe than the $190 million (€144 million) operating deficit the company had predicted. The unit's pretax operating loss was $149 million (€113 million) compared $293 million (€222 million) a year earlier.

Ford says it was able to trim European losses by holding vehicle prices steady despite industry pricing pressure. The company's sales in the region slid 7%, matching the overall market decline. Revenue fell 17% to $7.2 billion.

In North America, pretax operating earnings jumped 17% to $2.1 billion (€1.6 billion), the highest profit for any quarter since at least 2000. Operating margin grew to 11.5% from 10.3% a year earlier. Revenue rose 4% to $18.6 billion (€14.1 billion).

The Asia-Pacific unit swung to a $95 million (€72 million) pretax operating loss from a $33 million (€25 million) profit a year earlier. Revenue increased 10% to $2.3 billion. Latin American earnings shrank 74% to $54 million (€41 million) despite a 4% gain in revenue to $2.4 billion (€1.8 billion).