Ford handily outperformed expectations as it delivered record net profits and operating income for the first quarter of the year on Thursday.
Net income jumped 113% to $2.45 billion for the January-to-March quarter, or 61 cents a diluted share. A year ago, Ford’s net totaled $1.3 billion, or 29 cents a share. Excluding one-time items, Ford earned 68 cents a share compared to a Wall Street forecast averaging 48 cents.
“Essentially everything has improved,” said Ford Chief Financial Officer Bob Shanks, who also said Ford expects 2016 overall to meet or exceed the company’s strong performance last year.
The carmaker expects to earn a pre-tax profit of at least $10.8 billion this year, which would be another record.
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Ford’s pre-tax profit came to $3.8 billion for the latest quarter. That was largely driven by strong results in North America where its operating margin surged to 12.9%, up from 10.2% for all of 2015. But worldwide vehicle sales also rose 10% to 1.7 million despite problems in recession-plagued Latin America.
Revenues also exceeded expectations, jumping 11%, to $37.7%. The street consensus had come in at $35.59 billion, according to an analyst poll by FactSet.
There were some weak spots, including the Mideast and Africa, and Brazil posted a 29% decline in sales for the quarter. But Ford could barely keep up with surging demand in the U.S. for its pickups and SUVs. Light trucks now account for about 60% of the market, and the Ford F-150 has solidified its lead in the pickup segment after a slow launch of a completely made-over, aluminum-intensive model a year ago.
U.S. sales of the broader F-Series line jumped 5% during the January-March quarter, while sales of the big Explorer SUV rose 39%. Ford also saw a 46% increase in demand for the Transit commercial van which replaced its aging E-van last year.
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CFO Shanks did sound a note of caution about the second half of 2016, warning that earnings will take a hit due to temporary planned production plant closures in North America.
He also hinted of plans to “tweak” production to reflect the continuing move in the U.S. market from cars to crossovers, SUVs and other light trucks. While he didn’t disclose specific details, Ford has already laid out plans to move several models, including the Focus and C-Max, to a new Mexican plant over the next several years.
That move has generated a fair bit of controversy during this year’s presidential campaign, but Ford has promised to keep its suburban Detroit plant busy by giving it new truck models to build.
Ford shares surged on Thursday, the automaker the most active stock on the New York Stock Exchange in pre-market trading.
The second-largest of Detroit’s automakers announced its earnings a week after General Motors also topped Wall Street forecasts with an adjusted $1.26 per share net, analysts expecting something close to $1.01. GM’s first quarter margin in North America was a more modest 8.7%.
(For the full story on GM’s Q1 earnings, Click Here.)