• News
  • Guides
  • Reviews
  • Media
  • About
  • News
  • Guides
  • Reviews
  • Media
  • About
Sign up Now (For Free)

Sign up for our newsletter and receive the latest automotive news in your inbox!

Invalid email address
We promise not to spam you. You can unsubscribe at any time.
Thanks for subscribing!
News
Read Now
  • All News
  • Automakers
  • Automobiles
  • Auto Shows
  • Business
  • EVs & Environment
  • Guides
  • Lawsuits/Legal
  • Regulatory
  • Ride-Sharing
  • Safety & Recalls
  • Technology
Recent
  • The Rearview Mirror: The Car That Started a ’70s Car Design Craze
  • Inflation Reduction Act Paying Off as Battery Makers Invest Billions in U.S. Factories
  • Back in Production, Ford Again Raises Pricing for F-150 Lightning.
  • First Look: 2024 Hyundai Sonata
  • Despite Two Decades of Warnings, Distracted Driving Remains a Major Problem
  • Treasury Dept Ruling Expected to Cut EV Tax Credits
  • Sen. Manchin Threatening to Sue Over New EV Battery Rules
  • Ford Bolsters EV Supply Chain with $4.5B Nickel Processing Plant
  • Unified UAW Talks Tough Before Contract Talks with Detroit Three
  • Faraday Future May Have One: Production Begins
Editor’s Choice
    Reviews
    Read Now
    • All Reviews
      • Feeder
    • Classic Cars
    • Concept Cars
    • Convertibles
    • Coupes
    • Crossovers/CUVs
    • Diesel
    • Hot hatches
    • Hybrids
    • Luxury Vehicles
    • Minivans
    • Muscle Cars
    • Pickups
    • Sedans
    • Sports Cars
    • Super Cars
    • SUVs
    Recent Reviews
    • A Week With: 2023 Nissan Rogue Platinum AWD
    • A Week With: 2023 Kia Soul GT-Line
    • A Week With: 2023 Ford Maverick Tremor
    • A Week With: 2023 Volkswagen ID.4 AWD Pro S
    • A Week With: 2023 Infiniti QX80
    • A Week With: 2023 Genesis GV80 Prestige 3.5 Turbo
    • First Drive: 2024 Dodge Hornet R/T
    • First Drive: 2023 Dodge Hornet GT
    • First Drive: 2023 Genesis Electrified GV70
    • First Drive: 2023 Nissan Ariya e-4orce AWD
    Editor’s Choice
      Guides
      Car Warranty
      • Endurance Warranty Reviews
      • BMW Extended Warranty
      • Extended Warranty For Cars Over 100k Miles
      • Extended Car Warranty Cost
      • Subaru Extended Warranty
      • CarShield Reviews
      • CarShield Cost
      • Aftermarket Car Warranty
      • CARCHEX Warranty Reviews
      • Reputable Extended Car Warranty Companies
      • Used Car Warranty Companies
      • Best Car Warranty
      • Is CarShield A Scam?
      • Mercedes Extended Warranty
      • CarShield Plans
      Insurance
      • How To Identify A Car Insurance Company
      • Geico Mechanical Breakdown Insurance
      • How Far Back Does A Car Insurance Company Look
      • Mechanical Breakdown Insurance For Used Cars
      • State Farm Mechanical Breakdown Insurance
      • Mechanical Breakdown Insurance From Progressive
      • Dollar A Day Insurance
      • Auto Insurance For SSI Recipients
      • Car Insurance Rates After A Suspended License
      • Auto Insurance For Salvage Vehicles
      • Average Cost of Dodge Ram 1500 Car Insurance
      • Car Insurance Florida
      • Full Coverage Auto Insurance
      • GrubHub Insurance
      • Amazon Delivery Auto Insurance
      Shipping
      • Car Shipping Companies
      • uShip Reviews
      • Auto Shipping From California To Hawaii
      • Montway Auto Transport Reviews
      • Cheap Car Shipping
      • Easy Auto Ship Reviews
      • Auto Shipping Miami
      • Auto Shipping To Alaska
      • Car Shipping Cost
      • Auto Shipping Hawaii
      • Auto Shipping Puerto Rico
      • Sherpa Auto Transport Reviews
      • Auto Shipping Atlanta
      • Auto Shipping Boston
      • Auto Shipping. Chicago
      About
      • About Us
      • Contact Us
      • Terms of Use
      • Privacy Policy
      • Affiliate Disclosure
      • Sitemap
      TheDetroitBureau.com

      More than just “another” place to find news, reviews, spy shots, commentary, features, and guides about the auto industry. TheDetroitBureau doesn’t stop with the press releases or confuse a few lines of opinion with insightful, in-depth reporting.

      Contact Us

      Like what you see? Have some ideas for making The Detroit Bureau.com even better? Let us know, we’d love to hear your voice.

        Media
        Listen Now
        • Headlight News: All Episodes
        More from TheDetroitBureau
        • Guides
        • Latest News
        • Auto Reviews
        • Podcasts
        Headlight News

        TheDetroitBureau.com’s Headlight News offers a look at the past week’s top automotive news stories, as well as what’s coming up in the week ahead. Check out the week’s top story and our latest review…along with a dive into the past with this week in automotive history.

        home > news > Automobiles > Ford “Core…Remains Strong” Despite Profit Dip

        Ford “Core…Remains Strong” Despite Profit Dip

        Mulally downplays modest decline.

        Joseph Szczesny
        Joseph Szczesny , Executive Editor
        Oct. 26, 2011
        Ford CEO Mulally with the new Focus ST.

        Ford Motor Co. earnings dipped slightly during the third quarter, triggering a modest sell-off by investors despite company assurances that it’s only a temporary setback – CEO Alan Mulally insisting insisting Ford’s “core…remains strong.”

        Ford posted earnings of $1.6 billion, or 41 cents per share, for the July – September quarter, a $38 million, or 2 cents per share – dip from year-earlier levels.   The decrease reflected higher raw material prices, the costs of new product launches and a dip in profit margins on new vehicles.

        A Profitable Source!

        Even so, chief executive Alan Mulally said Ford continued to strengthen its balance sheet, invest for future growth, as well as take actions to improve its competitiveness

        “We delivered solid results for the third quarter despite an uncertain business environment,” Mulally said, arguing that, “The core of our business remains strong.”

        The suburban Detroit maker, he contended, is just beginning to realize the benefits of his One Ford Plan, which emphasizes global, rather than regional product development.  Efficiency gains in the “One-Ford” product development plans are helping Ford hold down capital expenditures without reducing the scope of its product plans, according to Mulally.

        The slight earnings dip comes as Ford reports a number of other gains, including an increase in its corporate debt rating – to one step below investment grade – and a new union contract expected to ultimately reduce labor costs over its four-year term.

        Lewis Booth, Ford’s chief financial officer, confirmed a recent report on TheDetroit Bureau.com that Ford is considering plans for restoring its quarterly dividend. However, the maker hasn’t made any kind of decision yet.

        “We don’t have any timetable,” cautioned Booth, adding that, “Obviously, we would like to pay it sooner rather than later.”

        Ford was being cautious about any commitment because they want to make sure the dividend policy is sustainable, Booth explained during a conference call with reporters and analysts.

        Ford’s third-quarter revenue was $33.1 billion, an increase of $4.1 billion from the same period in 2010. Ford generated positive automotive operating-related cashflow of $400 million in the third quarter. Despite the increased revenue and pre-tax profits, operating margins dropped from 6.2% to 4.8%, according to the information presented by Ford.  Officials blamed the decline on rising incentive levels created by competition, among other factors.

        Third-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 the third-quarter 2010 as improvements in results from the company’s automotive business were were offset by reductions in income from Financial Services.

        For 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.

        Mulally said Ford’s third-quarter net income was affected by unfavorable special items of $98 million. Those included personnel reduction actions, the elimination of the Mercury brand and other dealer-related actions in North America.

        Third-quarter Ford Credit pre-tax operating profit was $581 million, a decrease of $185 million from third-quarter 2010, consistent with previous guidance.

        The third-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, however, Ford’s European and Asian operations posted a loss for the period.

        Ford 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 cash reserves, 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.

        “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 Booth. “Our liquidity remains strong, and we will continue to take actions when appropriate to strengthen our balance sheet.”

        Within automotive results, the pre-tax operating profit was reduced by about $350 million for unrealized mark-to-market adjustments on commodity hedges for future periods, which were used to offset rising prices for critical materials.

        The 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.

        How to Care for Your Car

        Cheap Car Warranty

        Editor's Choice

        Best Extended Car Warranty

        Editor's Choice
        Recently Published

        The Rearview Mirror: The Car That Started a ’70s Car Design Craze

        Yesterday
        Ultium Battery Pack

        Inflation Reduction Act Paying Off as Battery Makers Invest Billions in U.S. Factories

        March 31, 2023
        2022 Ford F-150 Lightning - muddy on trail

        Back in Production, Ford Again Raises Pricing for F-150 Lightning.

        March 31, 2023

        Leave a Reply Cancel reply

        Your email address will not be published. Required fields are marked *

        Share this article:
        © The Detroit Bureau 2023
        • Guides
        • Privacy Policy
        • Terms of Use
        • Affiliate Disclosure
        • Contact Us
        • Sitemap
        Follow Us: