COLOGNE, Germany - Ford Motor Company today reported a 2014 second quarter pre-tax profit of $2.6 billion, its 20th consecutive profitable quarter and its best since second quarter 2011.
In Europe, Ford earned its first quarterly profit since the market dramatically declined three years ago. A second quarter pre-tax profit of $14 million represents a $320 million improvement from a year ago.
The improvement is more than explained by lower costs and favourable exchange. This was partially offset by lower results and royalties from Ford’s joint ventures, primarily in Russia, along with lower parts and accessories profit.
Restructuring costs were lower than a year ago, primarily due to a reserve release this quarter associated with its Cologne investment agreement and non-recurrence of a facility write-off in Genk last year.
In the second quarter, wholesale volume was about unchanged from a year ago, while revenue improved 10 percent. Europe 20’s SAAR was 14.4 million units, up 700,000 units from a year ago.
The increase was offset partially by industry declines in Russia and Turkey. Europe’s higher revenue mainly reflects higher volume in the Europe 20 markets and favourable exchange, partially offset by unfavourable mix.
Europe 20 market share, at 7.9 percent, was down 0.2 percentage points from a year ago, reflecting primarily a reduction in rental and fleet share, as well as adverse industry segmentation in passenger car.
Europe 20 commercial vehicle share improved in the second quarter to 10.6 percent, up 0.5 percentage points from a year ago to Ford’s highest second quarter share since 1997; this was driven by Ford’s refreshed and expanded range of Transit products.
Ford’s full-year guidance for Europe remains unchanged, with the region expected to improve pre-tax results compared with 2013. Consistent with the normal seasonality of sales and production, Ford expects Europe’s second half loss to be higher than the first half loss of $180 million. Lower second half wholesale volumes of about 100,000 units include the effect of summer shutdowns in the third quarter and year-end shutdowns in the fourth quarter.
In addition, Ford expects higher restructuring-related costs in the second half, including the non-repeat of a reserve release and higher launch-related costs with the start of production of the all-new Mondeo and the new Focus.