Summary
Ford Motor Company reported a net income of $989 million for the first quarter of 2014, or $0.24 per diluted share. This represents a significant decrease from the $1,611 million net income ($0.40 per diluted share) reported in the same period of 2013. The decline was primarily driven by adverse factors in the Automotive sector, including a substantial increase in warranty reserves and premium freight and labor costs related to harsh winter weather in North America, as well as significant currency devaluations and balance sheet charges in South America, particularly Venezuela. Despite these headwinds, Ford highlighted improvements in its European operations, which are progressing with their transformation plan, and record profits in Asia Pacific. The Financial Services sector also contributed positively, with higher pre-tax profit driven by increased volume across its financing products. The company is focusing on executing its "One Ford" plan, aiming for profitable growth and balance sheet improvement, while managing production volumes and cost structures.
Financial Highlights
32 data points| Revenue | $35.88B |
| Cost of Revenue | $31.02B |
| Gross Profit | $4.86B |
| SG&A Expenses | $3.37B |
| Operating Expenses | $35.11B |
| Net Income | $1.23B |
| EPS (Basic) | $0.25 |
| EPS (Diluted) | $0.24 |
| Shares Outstanding (Basic) | 3.95B |
| Shares Outstanding (Diluted) | 4.09B |
Key Highlights
- 1Net income attributable to Ford decreased to $989 million in Q1 2014 from $1,611 million in Q1 2013, impacting earnings per share ($0.24 vs. $0.40 diluted).
- 2Automotive sector results were significantly impacted by approximately $900 million in adverse factors, including a $400 million increase in warranty reserves and $100 million in premium weather-related costs in North America, and approximately $400 million in balance sheet exchange effects in South America.
- 3Automotive sector revenues remained flat at $33.88 billion, while total costs and expenses increased by $1.24 billion to $35.11 billion, leading to a lower Automotive pre-tax profit of $797 million compared to $1,620 million in the prior year.
- 4Financial Services sector revenue increased to $2.00 billion from $1.79 billion, and pre-tax profit rose to $462 million from $503 million, driven by higher financing volume.
- 5The company's total assets increased to $207.1 billion from $202.2 billion, with Cash and cash equivalents decreasing to $13.0 billion from $14.5 billion.
- 6Ford reiterated its "One Ford" plan, focusing on profitable growth, balance sheet improvement, and product development, while expecting full-year 2014 pre-tax profit to be in the $7 billion to $8 billion range (excluding special items).
- 7Despite the challenging quarter, Ford announced an increase in its revolving credit facility to $12.2 billion and designated Ford Credit as a subsidiary borrower.