Ford’s Profit Drops 34%

Ford Motor Co. posted net earnings of $835 million in July-September 2014 compared with nearly $1.3 billion in the same period last year.

Revenue and wholesale deliveries each slipped 3%, to $34.9 billion and 1.49 million units, respectively. The company's pretax profit for the quarter plunged 54% to $1.2 billion.

Ford expects full-year pretax profits of about $6 billion, excluding special items.

In North America, higher recall costs and lower sales volume cut third-quarter pretax profit 39% to $1.4 billion. Revenue declined 6% to $19.9 billion, and wholesale deliveries shrank 8% to 665,000 vehicles. Ford says production was hurt by parts shortages and five weeks of downtime while it retooled for the aluminum-intensive F-150 pickup truck due at year-end.

The F-Series changeover contributed to a negative $700 million cash flow in July-September, Ford's first negative quarter since 2010.

In Europe, third-quarter sales climbed 6% to 321,000 units, and revenue grew 8% to $6.9 billion. But Ford's pretax loss in the region jumped to $439 million from $182 million in 2013 as sales in Russia plummeted. The company expects a full-year pretax loss in Europe of about $1.2 billion compared with $1.6 billion in 2013 and $1.8 billion in 2012.

Wholesale volume also rose in Asia Pacific, where deliveries climbed 5% to 346,000 units, and revenue (not including joint ventures in China) increased 4% to $2.6 billion. The company blames unfavorable exchange rates and the cost of building new factories for slashing its quarterly pretax profit in the region to $44 million from $116 million in 2013.

In South America, Ford third-quarter wholesale deliveries plunged 21% to 113,000 vehicles, and revenue fell 18% to $2.3 billion. The company swung from a pretax profit of $160 million last year to a $170 million loss this year. Ford anticipates a full-year loss of $1 billion in the region.

Ford Motor Credit Co. boosted its third-quarter pretax profit 17% to $498 million. The unit is expected to deliver a full-year pretax profit between $1.8 billion and $1.9 billion.