This story has been updated with new information.
Ford enjoyed a strong third quarter, reporting a 63% rise in net income to $1.6 billion, or 39 cents per share, on revenue of $36.5 billion, largely on cost control measures and strong truck sales in North America.
The company’s operating profit for the third quarter was $2 billion or 43 cents per share, which was up 40% compared with year-ago period.
“I want to smile with the results today because we’re going to build on this going forward,” said Ford CEO Jim Hackett during a conference call.
While truck sales were strong, especially its high-profit sport-utility vehicles, Ford’s overall sales fell 2% to 1.5 million cars and trucks. The company saw sales drop in China, North America and the Middle East; they rose in Europe and South America.
(Management shake up continues at Ford. For the story, Click Here.)
U.S. sales of F-Series pickups rose 14% forthe quarter. The company said buyers paid an average of $45,400 per truck, up $2,800 from third quarter of 2016. The increase is driven by higher levels of content on these vehicles, such as infotainment systems and rear-view cameras, the company noted.
Overall, the company noted its average transaction prices increased at twice the rate of other automakers in the U.S. during the third quarter.
As a result of the positive quarterly results, Ford raised its full-year earnings estimate to $1.75 to $1.85 per share, up from $1.65 to $1.85. That compares to $1.76 per share in 2016.
(Ford readying wave of new products, hints Hackett. Click Here for the story.)
Bob Shanks, Ford CFO, described the quarter as a “good down payment” on the company’s future efforts, especially as it looks to cut costs by $14 billion by 2022. The cost controls during last quarter came from a reduction of non-repeat recalls, a reduction in material cost efficiencies and lower structural costs.
Ford’s margin for the quarter came in at 8.1% and Shanks expects that to improve slightly as the cost control efforts continue through the rest of the year. The automaker’s market share dropped slightly in the U.S. to 13.5% despite a 4% rise in sport-ute sales during the period.
Despite a small decline in sales in China, the world’s largest auto market, the company reported records in operating margin and pre-tax profit in its Asia-Pacific business. The rest of the company’s businesses around the world were basically “break-even.”
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Shanks noted that profitability in Europe was down, posting an $86 million loss, but he expected the business would rebound into the black during the fourth quarter. Ford Europe was hit by costs associated with the Brexit process, the company reported.