Ford Reports Lower than Expected Profits for Q1 2015

Ford has reported lower-than-expected profits for Q1 2015 after it sold fewer vehicles in North America and continued to lose money in Europe and South America.

Pre-tax profit for Q1 2015 rose $24 million to $1.4 billion, but revenue slipped $2 billion to $33.9 billion.

The carmaker sold 1.57 million vehicles, down 21,000 compared with a year earlier.

There were 678,000 sales in North America – a fall of 39,000.

The introduction of a new F-150 pickup affected sales in North America as vehicles are still being sent to dealers, while customers waited for a new model of the Ford Edge SUV. The two models are among the company’s most profitable.

However, Ford said it expected a “very strong year” in North America, despite a slight fall in revenue to $20 billion and an 11% slide in pre-tax profit to $1.34 billion.

Ford – which employs about 194,000 people globally at 66 plants – maintained its full-year forecast for pre-tax profits of between $8.5 billion and $9.5 billion.

Ford CFO Bob Shanks said the carmaker was on track for a “breakthrough year”.

CEO Mark Fields also said Ford would “grow progressively stronger” as recent launches “start to pay off”.

The results were lower than analysts had expected, Ford said, because they had forecast a tax rate of 29% for the quarter, while the company paid 34%.

Europe remained a weak spot even though sales rose 2% to 376,000 vehicles in the quarter, with revenue down $900 million to $6.9 billion and pre-tax losses totaling $185 million.

There was robust demand for commercial vehicles such as the Transit van.

Revenue in South America fell 20% and the carmaker remained in the red for the region with a $189 million loss as it replaced legacy products with those from its “One Ford” range.

That was better than the $510 million loss for the period in 2014, which included a $310 million charge to offset currency devaluation in Venezuela.

Prospects in Asia were brighter, as sales rose 16,000 to 366,000 vehicles and a $103 million profits.

The financing operation, Ford Credit, returned a profit of $483 million on the back of higher lending.

Ford Q1 dividend was raised by 20% to 15 cents a share.