(This story has been updated with additional details on Ford’s Q1 earnings and full-year forecast.)
Hurt by weak sales in Europe, the slow ramp-up of its new F-150 pickup at home, as well as the strong dollars, Ford Motor Co. delivered a weaker-than-expected showing for the first quarter of 2015, earnings off 6.5%, to $924 million.
That worked out to just 23 cents a share, the Detroit maker reported, down from 25 cents a year ago. The consensus estimate on Wall Street was 26 cents per share, according to both Fact Set and Thomson Reuters. Revenues also fell short, at $31.8 billion, down from $33.9 billion a year ago.
Nonetheless, CEO Mark Fields declared that 2015 will be a “breakthrough year,” adding in a statement that the first quarter, a good start to a year in which our results will grow progressively stronger as the new products we have been launching start to pay off.”
The automaker said it was maintaining its full-year pretax profit forecast of between $8.5 billion and $9.5 billion, while increasing its North American operating margin estimate to somewhere between 8.5 and 9.5%. It had previously projected the margin would come in somewhere between 8 and 9% for the full year.
Getting there will, nonetheless, require Ford to overcome some key obstacles, analysts cautioned. Among the biggest is Europe, where the maker continues to struggle to claw back into the black after the Continents worse economic slumps in decades. It recently shifted management, putting long-time global marketing chief Jim Farley in charge of European operations.
But Ford faces some headwinds beyond its control there, notably the collapse of the Russian economy which has seen auto sales tumble by half in recent months.
(Ford recalls 390,000 vehicles due to doors that can fly open. Click Here for details.)
Ford also faces challenges in South America where sales have been struggling.
The strong dollar has had its impact, as well, complicating matters as Ford pushes to export more of its products, such as the 2015 Ford Mustang – the pony car going global for the first time in its 51-year history.
The North American market has also been facing challenges. Just last week, Ford announced it would drop one of its three shifts at the Michigan Assembly Plant in the Detroit suburb of Wayne, impacting 700 workers. The factory produces the compact Ford Focus and C-Max models, along with a variety of battery-based offerings – all sliding in demand as a result of the slump in oil prices.
Passenger cars, overall, made up barely 45% of the U.S. market last month, and that has actually been a boon for some of Ford’s truck products, such as the Explorer SUV. But the maker hasn’t been able to fully capitalize on the shift in consumer demand because it is still slowly ramping up production of the all-new, “aluminum-intensive” F-150 pickup.
With both assembly plants now online, Ford hopes to see a big jump in sales in the coming months. It helps that the Supercrew version of the F-Series just won the top safety designation from the National Highway Traffic Safety Administration.
But for the first quarter, Ford’s U.S. market share slipped 0.5 points to 15.0%, noted data firm Kelly Blue Book.
“The all-new aluminum truck is gaining traction in the marketplace, but its production rate isn’t up to the previous version, and sales still aren’t growing as fast as the segment average,” noted analyst Karl Brauer. “This means primary truck competitors, including Chevrolet, GMC and Ram, are gaining share against Ford.”
(GM CEO Mary Barra rules out possible merger, alliance with Fiat Chrysler. Click Here for the story.)
Investors acted warily to the early morning announcement, Ford shares slipping 2% in trading before the morning bell. That followed a 0.8% increase on Monday that saw Ford shares close at $15.90. The stock has been relatively static over the last year, climbing just over $18 at its peak, with a $13.26 low.
Ford’s weak performance comes a week after General Motors revealed it also fell short for the first-quarter. But overseas, Daimler AG reported its Q1 earnings nearly doubled as it raced new products to market.
(For the full story on GM’s Q1 earnings, Click Here.)