Newly installed Ford Motor Co. chief executive Mark Fields has one quarter of report to deliver. Results were mixed, but Fields is optimistic and confident that Ford would do much better in 2015. For the third quarter of 2014, Ford logged a 54-percent drop in pretax operating profit in the third quarter to $1.18 billion, no thanks to lower sales volume and higher warranty costs.
The carmaker also saw its net income drop 34 percent to $835 million, although results were ridden with one-time charges. Ford logged a slimmer fall in revenues at 3 percent to $34.9 billion. Ford posted profits in North America and in Asia Pacific, although it logged losses in Europe, South America and the Middle East & Africa.
In a statement, the carmaker said that during the quarter it launched an “unprecedented number” of new vehicles and invested heavily in the new products and technologies. These may have affected the results negatively for the quarter although they are expected to deliver strong profitable growth starting 2015.
The carmaker is in the midst of its busiest product launch schedule ever, and has already launched 12 of 23 new or refreshed models globally this year. One of these launches is the redesigned Ford F-series pickup. Ford chief financial officer Bob Shanks admitted having some challenges during the quarter, but said everything was in line with their expectations at the end of September. ”
During the investor conference at end of September, Fields said they are now expecting a lower profit for 2014 at a range of between $1 billion and $2 billion. Ford said the lower guidance is attributable to factors like economic weakness in Russia and South America as well as $1 billion in unplanned warranty expenses.