Ford hit by European losses

FORD has reported a first quarter pre-tax operating profit of $2.3 billion, a decrease of $544 million from first quarter 2011 due in part to a poor performance in Europe.


Although Ford has posted a pre-tax operating profit for 11 consecutive quarters, its European subsidiary reported a first quarter pre-tax operating loss of $149m, compared with a profit of $293m a year ago.


The decrease, said Ford, was primarily explained by lower industry volumes, lower demand for parts and accessories, and actions to reduce dealer stocks consistent with industry levels.


InEurope, Ford sold 372,000 units in the first quarter, down 60,000 units from a year ago. Revenue in the first quarter, which excludes sales at unconsolidated joint ventures, was $7.2bn, a decline of $1.5bn from a year ago.


Ford said it continued to expect its European business to incur a full year loss in the range of $500-$600m, with its European operation benefiting from the launch of new products in addition to the completion of stock reduction actions and continued cost reductions that would positively affect results primarily in the second half of the year.


Ford Motor Company revenue was $32.4bn in the first quarter, a decrease of about $700m from first quarter 2011. First quarter net income was $1.4bn, a decrease of $1.2bn from first quarter 2011. About half of the decrease was due, said Ford, to higher tax expense in first quarter 2012, with the balance reflecting lower operating results and increased special charges


Automotive pre-tax operating profit was $1.8bn for the first quarter, a decrease of $294m from first quarter 2011.


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