Ford Motor Co. saw its net income drop 86% to $148 million on revenue of $38.9 billion, which matched the year-ago revenue figure. The massive drop came as a result of $1.2 billion charges the company took during the quarter.
If the special charges, which were taken for the restructuring of South America and Europe, are backed out the company s second quarter income rises to $1.8 billion, which would have matched last year’s results for the same period.
Cash flow from operating activities for the first half of 2019 was $10 billion, up $1.5 billion. Adjusted free cash flow for the same period was $2.1 billion, up 80%. The company’s cash and liquidity balances remain strong and above targets, finishing the quarter at $23.2 billion and $37.3 billion, respectively.
“Midway through this key year of action, we are pleased with the progress we are making toward creating a more dynamic and profitable business,” said Jim Hackett, Ford president and chief executive officer, in a statement.
“In this time of profound change in our industry, Ford has amazing opportunities to delight customers, innovate and collaborate in new ways, and create value.”
The company saw growth in earnings before interest and taxes, or EBIT, for the second consecutive quarter for the first time in three years. The company’s overall “fitness,” i.e. structural costs have improved in all areas, except pension and other post-employment benefits.
Automotive earnings before interest and taxes (EBIT) in the quarter was $1.4 billion, up
19%, driven by improvement in mix and net pricing, especially North America’s franchise strengths in trucks and sport-utility vehicles.
The company further strengthened its worldwide product portfolio, with launches of the all-new Ford Explorer and Police Interceptor Utility and new-to-market Lincoln Aviator, and unveiled the Ford Puma, an all-new compact crossover for the European market.
Ford Credit delivered another strong quarter, with earnings before taxes of $831 million, up
29 percent. The company reported favorable loss metrics which reflect healthy consumer credit conditions, and auction values for off-lease vehicles performed better than expectations.