Ford Motor Co. posted a 57-percent drop in net income for the second quarter of 2012, to $1.04 billion from $2.40 billion in the same period in 2011. The carmaker posted $1.8 billion in pretax profits for the review period, a sharp decline from the $2.9 billion in pretax profits for the same period in 2011. The company likewise posted a $2.2 billion dive in revenues to $33.3 billion in the second quarter of 2012.
Much of Ford’s profits were accounted for by its North American operations, logging $2 billion in pre-tax profits in the second quarter of 2012 from $1.9 billion a year earlier. The decline in the carmaker’s overall net income, however, was primarily due to $404 million loss recorded by its Ford of Europe business, contrasting its second quarter results in 2011, when the unit posted $176 million in profits.
Ford expects its European operations to log more than $1 billion in full-year loss for 2012. In a statement, Ford said the magnitude of the loss will be affected by several factors like overall economic environment, competitive actions and Ford's response to these developments. Ford likewise posted a $66 million second-quarter loss in the Asia Pacific-Africa region this year, in contrast to a $1 million pretax profit in 2011.
Ford suffered a $267-million drop in profit in South America, to $5 million profit, down from $267 million a year ago. Another unit, Ford Motor Credit, logged a $438 million in pre-tax profit for the second quarter of 2012, compared with $604 million for the first quarter in 2012.
Ford chief executive Alan Mulally attributed the company’s solid second quarter performance to Ford North America and Ford Credit. Ford plans to increase its overall production volumes by 69,000 units in the third quarter of 2012 compared with the figures for the same period in 2011.
While Ford anticipates a decrease in production volumes by 31,000 units in Europe, it plans to offset the drop by boosting production volumes in Asia-Pacific and Africa by 65,000, in North America by 34,000, and in South America by 1,000 units.