tFord Motor Company (NYSE: F) today reported third quarter 2011 net income of $1.6 billion, or 41 cents per share, a decrease of $38 million, or 2 cents per share, versus third quarter 2010. During the quarter, Ford continued to generate solid profits, strengthen its balance sheet, invest for future growth, as well as take actions to improve its competitiveness.
t"We delivered solid results for the third quarter despite an uncertain business environment by continuing to serve our customers around the world with best-in-class vehicles," said Alan Mulally, Ford president and CEO. "We accomplished this while continuing to invest for future growth and focusing on developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value."
tThird quarter 2011 pre-tax operating profit was $1.9 billion, or 46 cents per share, a decrease of $111 million, or 2 cents per share, from third quarter 2010. Improved total Automotive results were more than offset by anticipated reductions in Financial Services.
tWithin Automotive results, pre-tax operating profit was reduced by about $350 million for unrealized mark-to-market adjustments on commodity hedges for future periods. These adjustments occurred because of the significant decline in commodity prices near the end of September. This is a non-cash charge that will either reverse should commodity prices increase or be offset by the benefit of lower commodity prices in the future.
tFor the first nine months, Ford earned a pre-tax operating profit of $7.7 billion, net income of $6.6 billion and reported Automotive operating-related cash flow of $4.9 billion. Ford continued to grow volume and revenue during the period.
tFord's third quarter net income was affected by unfavorable special items of $98 million. The special items include personnel reduction actions, Mercury and other dealer-related actions in North America.
tThird quarter Ford Credit pre-tax operating profit was $581 million, a decrease of $185 million from third quarter 2010, consistent with previous guidance.
tThird quarter total Automotive pre-tax profit was $1.3 billion, an increase of $45 million from the same period a year ago. North America and South America reported pre-tax profits for the third quarter, while Europe and Asia Pacific and Africa posted a loss for the period.
tFord's third quarter revenue was $33.1 billion, an increase of $4.1 billion from third quarter 2010. Ford generated positive Automotive operating-related cash flow of $400 million in the third quarter.
tFord also continued to strengthen its balance sheet, with a net reduction in Automotive debt of $1.3 billion in the third quarter. This included payment of the remaining $1.8 billion balance of secured Term Loan debt, which was offset partially by an increase in low-cost loans to support advanced technology. Ford ended the third quarter with $20.8 billion of Automotive gross cash, a decrease of $1.2 billion compared to June 30, 2011. Automotive gross cash exceeded debt by $8.1 billion, an improvement of $10.7 billion from a year ago. Ford's Automotive liquidity totaled $31 billion.
t"We remain well on track to deliver improved full year pre-tax operating profit and Automotive operating-related cash flow, consistent with our guidance," said Lewis Booth, Ford executive vice president and chief financial officer. "Our liquidity remains strong, and we will continue to take actions when appropriate to strengthen our balance sheet."
tTHIRD QUARTER 2011 HIGHLIGHTS
t * Increased market share in the U.S. and Europe
t * Ford continued as the best-selling brand in the U.S., with sales up 14 percent from a year ago
t * Increased sales volume by more than 30 percent in Russia
t * Increased market share in Asia Pacific Africa
t * Launched 2.0-liter EcoBoost in North America in Explorer and Edge
t * Eight Ford vehicles ranked in the top three in their respective segments in the U.S. in J.D. Power APEAL
t * Launched new global Ranger in Asia Pacific Africa
t * Started production of all-new Focus in Russia and new Fiesta in India
t * Concluded four-year agreement with UAW that improves Company's competitiveness in the U.S.
t * Credit ratings upgraded
t * Announced several new growth and other initiatives, including:
t o $1 billion investment to build an integrated vehicle and engine manufacturing facility in Gujarat, India
t o Started construction for a new $350 million transmission plant in Chongqing
t o Initiated 50-50 joint venture in Russia with Sollers as of Oct. 1
t o Memorandum of understanding with Toyota to collaborate on light truck and SUV hybrid system and next-generation in-car telematics services
t o Two-year alliance with Zipcar, establishing Ford as the largest university vehicle partner of Zipcar's U.S. car sharing network