Ford Motor Co. logged a $544 million drop in pre-tax operating profit for the first quarter of 2012 to $2.3 billion, as it was hurt by losses at its European and Asian operations. The company also posted a $700 million decline in global revenues to $32.4 billion, and a $1.2 billion dive in net income to $1.4 billion.It should be noted that half of the decline in net profit was particularly due to higher tax expenses and special charges.
The company’s global performance was eventually saved by its North American operations, which posted an operating profit of $2.1 billion in the first three months of 2012 compared to $1.8 billion in the same period in 2011. Ford’s quarterly profit in North America in 2012 was the highest ever since the company started to report the region as a separate business unit in 2000.
What hurt Ford’s results the most in the first quarter of 2012 was the $149 million operating loss at its European operations, which posted a $293 million in profit for the same period in 2011. The company pointed the blame to lesser industry volumes as well as reduced demand for auto parts and accessories.
The company’s Asia-Pacific-Africa unit bled as well, posting a $95 million in operating losses in the first three months of 2012, a sharp contrast to $33 million in profit for the same period in 2011. Ford attributed the loss to higher cost related to its investments in new production in the region. The company also attributed the loss to slower-than-expected rollout of the global Ranger pickup from its Thai and South African sites.
The company’s South American operations suffered as well, but managed to post $54 million in pre tax profit for the first quarter of 2012, down from $210 million for the same period in 2011. Ford Motor Credit Co., posted $452 million in first quarter 2012 pre-tax operating profit, compared to $713 million in 2011. The company ascribed the loss at its lending unit to fewer lease terminations. Ford chief executive Alan Mulally commended the company’s strong performance in the first quarter of 2012 despite having to cope with a challenging global external environment.