Ford Motor Co. reports first-quarter earnings on Thursday, April 25.Gene J. Puskar/The Associated Press
Ford Motor Co on Thursday posted a better-than-expected first-quarter largely due to strong pickup truck sales in its core U.S. market and said it was more confident in its forecast 2019 would bring better results than last year.
The first-quarter results sent Ford’s shares up as much as 8 per cent in aftermarket trading.
Ford is restructuring its business, which will include cutting costs by $11 billion by 2021 and overhauling its product lineup.
Chief Financial Officer Bob Shanks told reporters at company headquarters in suburban Detroit that Ford has more confidence its 2019 results will be better than last year’s, but said it is in a “volatile environment with very strong competition.”
Shanks added the first quarter was likely Ford’s best for the year.
Virtually all of the No. 2 U.S. automaker’s profit was generated in the U.S. market, thanks to a strong performance by its best-selling F-Series pickup trucks and its new Ranger mid-size pickup. The company lost money in most other markets, but less than it had expected.
The company’s decision to kill off most of its unprofitable passenger cars in the U.S. market meant that its revenue rose 2 per cent despite a 14 per cent drop in wholesale unit sales.
Ford also made a small profit in Europe and the profit at its financing arm also grew. But the automaker’s global market share fell to 5.9 per cent from 6.5 per cent as it lost ground in every major market except North America.
“We still have lots and lots of work to do,” Shanks said. “It’s the beginning of the game, it’s not game over.”
Ford’s biggest challenges lie outside the United States. The automaker is struggling in China. Earlier this month, Ford said it plans to launch more than 30 new models in China over the next three years, as it seeks to reverse a two-year sales slump in the world’s top auto market.
The automaker saw its sales fall 48 per cent in the quarter, but said higher-priced products helped deliver a smaller loss than in the same quarter in 2018.
In March, Volkswagen AG and Ford signed a deal to develop mid-size pickup trucks and are continuing discussions about extending the alliance to include electric and autonomous vehicles and mobility services.
The two automakers have yet to reach agreement on a potential VW investment in Ford’s Argo AI self-driving unit.
CFO Shanks said those talks were “going very well.”
On Wednesday, Ford said it will invest $500 million in U.S. electric vehicle startup Rivian Automotive LLC, joining e-commerce giant Amazon Inc in backing the potential rival to Silicon Valley’s Tesla Inc.
Ford posted a quarterly net profit of $1.15 billion or 29 cents per share, down 34 per cent from $1.74 billion or 43 cents per share a year earlier. Excluding one-time items, Ford earned 44 cents per share, above analyst estimates of 27 cents, according to IBES data from Refinitiv.
Ford reported revenue of $40.3 billion for the quarter, down 4 per cent from $42 billion a year earlier.