Ford Motor Co. (F) posted disappointing earnings for the third quarter, sending the stock tumbling nearly 2% in early morning trade on Thursday. Recall costs, reduced inventory and changes for the F-150 in North America contributed to the carmaker’s downbeat performance last quarter.
Here are three takeaways from Ford’s latest earnings report:
1. Earnings Sank Nearly 55%, Revenue Dipped 6%
Earnings for the third quarter were down nearly 55% to $1 billion. Earnings per share came in at 24 cents, lower than the 55 cents per share posted in the same quarter last year. Earnings last year during the same period were $2.2 billion.
Ford did manage to beat analyst estimates, however. Adjusted pre-tax profit came in at $1.4 billion, which beat guidance of $1 billion.
Revenue in the quarter fell 6% to $35.9 billion.
2. North American Sales Were the Biggest Drag
Sales in North America saw the biggest decline. Pre-tax profit fell almost 57% to just $1.26 billion compared to $2.9 billion in the same quarter last year.
The profit margin in North America dropped from 12.4% last year to 5.8% in the third quarter of this year. Wholesale volume was also down, falling 11%. Revenue in North America fell by $1.9 billion to $21.8 billion.
Ford CFO Bob Shanks said the disappointing results in North America were primarily due to a door latch recall, “normalization” of F-150s sales mix and the company’s launch of a new Super Duty.
In September, Ford announced in a regulatory filing that the door latch recall would cost the company $640 million in earnings.
3. Results Were Better in Other Regions
Sales in China were up over 11% year-to-date. In Europe, pre-tax profits came in at $138 million. Ford had its best quarter in nearly a decade in Europe.
The carmaker posted $131 million profit in Asia Pacific.
The automaker reaffirmed its guidance of $10.2 billion pre-tax profit for the year. Ford lowered its forecast for 2017 last month, but noted that results will improve in 2018.
