10-QPeriod: Q3 FY2015

FORD MOTOR CO Quarterly Report for Q3 Ended Sep 30, 2015

Filed October 27, 2015For Securities:FF-PCF-PDF-PB

Summary

Ford Motor Company (F) reported strong financial results for the third quarter and the first nine months of 2015, exceeding expectations and demonstrating significant year-over-year improvements. Total revenues for the third quarter rose to $38.1 billion from $34.9 billion in the prior year, while net income attributable to Ford Motor Company surged to $1.9 billion ($0.48 per diluted share) from $835 million ($0.21 per diluted share) in the same period last year. The company highlighted record pre-tax profit for the third quarter and robust operational cash flow, driven primarily by the Automotive sector, particularly its North America operations which posted record results. The Financial Services segment, mainly Ford Credit, also contributed positively with its best quarter since 2011. Despite a challenging global economic environment, Ford managed to improve its market share and deliver strong operational performance across key regions. The company also reiterated its positive outlook for the full year 2015, expecting continued revenue growth, improved operating margins, and higher pre-tax profits, underscoring a "breakthrough year" for Ford.

Financial Highlights

33 data points
Beta

Revenue

$38.14B

18.2% Gross Margin

Net Income

$2.19B

5.7% Net Margin

EPS (Diluted)

$0.55

Total Assets

$219.58B

Cash & Equivalents

$14.69B

Free Cash Flow

$6.46B

Financial Statements
Beta
Revenue$38.14B
Cost of Revenue$31.21B
Gross Profit$6.93B
SG&A Expenses$2.39B
Operating Expenses$35.50B
Interest Expense$206.00M
Net Income$2.19B
EPS (Basic)$0.55
EPS (Diluted)$0.55
Shares Outstanding (Basic)3.97B
Shares Outstanding (Diluted)4.00B

Key Highlights

  • 1Total revenues increased to $38.1 billion in Q3 2015 from $34.9 billion in Q3 2014.
  • 2Net income attributable to Ford Motor Company more than doubled to $1.9 billion in Q3 2015 from $835 million in Q3 2014.
  • 3Diluted earnings per share rose to $0.48 in Q3 2015 from $0.21 in Q3 2014.
  • 4The Automotive sector saw significant improvement, with Q3 2015 pre-tax results (excluding special items) at $2.2 billion, up from $1.5 billion in Q3 2014.
  • 5North America operations achieved record pre-tax profit in Q3 2015.
  • 6Ford Credit reported its best quarter since 2011, with pre-tax profit of $526 million in Q3 2015.
  • 7Company reiterates strong full-year 2015 outlook, expecting a "breakthrough year" with higher revenues, operating margins, and pre-tax profits.

Frequently Asked Questions

The primary drivers were strong performance in the Automotive sector, particularly in North America, which delivered record pre-tax profit. Favorable market factors, increased wholesale volume and revenue, improved net pricing, and growth in market share, especially in North America and Europe, contributed significantly. Additionally, Ford Credit, the financial services arm, had a strong quarter, marking its best performance since 2011.

Ford Credit, the company's Financial Services sector, showed robust performance, achieving its best quarter since 2011 with a pre-tax profit of $526 million. This was driven by favorable volume and mix, primarily due to higher consumer finance receivables globally and an increase in leasing in North America. While credit losses saw a slight increase, they remained at a low absolute level.

Ford maintained a positive outlook for the full year 2015, describing it as a "breakthrough year." The company expected continued top-line growth in a global industry that was projected to be relatively flat, improved global market share, and a stronger bottom line with higher Automotive operating margin and pre-tax profit. Ford Credit was also expected to meet or exceed its 2014 pre-tax profit levels.

Yes, special items were noted. For the first nine months of 2015, total special items for the Automotive sector were $(763) million, primarily related to separation costs. In Q3 2015 specifically, there were $(160) million in personnel and dealer-related items and $166 million in "Other Items" related to the Nemak IPO. Management typically analyzes results excluding these special items to better understand ongoing operational performance.