Ford automotive results are up, with a $2.6 billion pre-tax profit reported in the company’s second quarter earnings this week, but Ford Credit is down from the year prior.
Ford Credit reported $434 million in income from continuing operations for the second quarter, down from this time last year when the company reported income of $454 million.
“Ford Credit’s lower pretax profit this quarter compared to a year ago is more than explained by a higher level of insurance losses from storm damage to dealer inventory in the quarter,” Bob Shanks, chief financial officer, said during the company’s earnings call. “Pretax profit was lower compared with first quarter, again, more than explained by the insurance losses just mentioned. For the full year, we now expect Ford Credit pretax profit to be higher than 2013, improved from about equal to or higher.”
Ford Credit’s expected year-end managed receivables are now $112 billion to $115 billion, up from our prior guidance of about $110 billion, according to Shanks.
Automotive profits continue to improve with Ford’s 20th consecutive profitable quarter and the best quarterly pretax profit since the second quarter of 2011, according to Chief Financial Officer Mark Fields.
“All automotive business units contributed to the company’s pretax profit, and all improved from a year ago, with the exception of South America,” Fields said. “North America achieved record quarterly performance for pretax profit; Asia Pacific achieved a second quarter record; and Europe earned its first quarterly profit since the market dramatically declined three years ago.”
South America reported a $295 million loss in income from continuing operations, the only global sector to report a loss for Ford in the second quarter.
“In South America, Brazil continues to face inflationary pressures despite higher interest rates and weakening economic growth,” Fields said. “The situation remains uncertain in Argentina and Venezuela.”
