Ford Motor Co. (F) on Wednesday reported a profit for the second quarter that more than halved from last year, as stronger results in North America were offset by weak results in Europe and other regions. However, adjusted earnings per share beat analysts' estimates.
Looking ahead, the automaker lowered its earnings outlook for fiscal 2012 and projects its full-year loss in Europe to exceed $1 billion.
Ford's automotive revenue for the quarter decreased 2.1 percent from last year to $31.4 billion. Total vehicle wholesales dropped 4.8 percent to 1.45 million units.
Ford North America pre-tax operating profit rose 5 percent from last year to $2.01 billion. Meanwhile, pre-tax operating profit in South America plunged from last year due to lower volume, higher costs and unfavorable exchange.
Ford Europe reported a pre-tax operating loss of $404 million, compared to pre-tax operating profit of $176 million last year, due to unfavorable volume, net pricing and higher contribution costs.
The company now expects its full-year loss in Europe to exceed $1 billion due to the "deteriorating external environment" in Europe.
Ford Asia Pacific Africa reported pre-tax loss of $66 million, compared to pre-tax operating profit of $1 million last year. Higher costs associated with new products and investments to support higher volumes and future growth negatively impacted results.
Ford continued to generate positive automotive operating-related cash flow, and ended the quarter with a liquidity position of $33.9 billion, an increase of $1 billion during the quarter.
Ford's second-quarter net income was $1.04 billion or $0.26 per share, down from $2.40 billion or $0.59 per share in the year-ago period.
Excluding special items and income or loss attributable to non-controlling interests, earnings per share for the quarter declined to $0.30 from $0.49 in the prior-year quarter.
On average, sixteen analysts polled by Thomson Reuters expected the company to earn $0.28 per share. Analysts' estimates typically exclude special items.
Revenues for the quarter declined 2.2 percent to $33.3 billion from $35.5 billion in the prior-year quarter. Analysts had a consensus revenue estimate of $32.17 billion.
For fiscal 2012, Ford expects total company pre-tax operating profit to be strong, but lower than 2011, with positive automotive operating-related cash flow. Earlier, the company had forecast total pre-tax operating profit to be about equal to 2011.
Meanwhile, Ford Motor Credit Co. reported net income for the second quarter of $296 million, down from $383 million in the year-ago period.
On a pre-tax basis, Ford Credit earned $438 million in the second quarter, down from $604 million in the previous year.
The decrease in pre-tax earnings reflects fewer lease terminations, which resulted in fewer vehicles sold at a gain, and lower financing margin.
For fiscal 2012, Ford Credit continues to expect pre-tax profit of about $1.5 billion, and total distributions to its parent of between $500 million and $1 billion.
F closed Tuesday's trading at $9.06. In Wednesdays pre-market, the stock is up $0.10 or 1.10 percent to $9.16.
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