Ford trucks drive record first-quarter earnings

Ford reported a record first-quarter profit of $2.5 billion today, more than doubling results from last year when the company was still ramping up production of the new F-150 and was missing a full supply of profitable full-size pickups.

Revenue for the first three months of 2016 hit $37.7 billion, up 11% from $33.9 billion a year ago when the company still had one of its two pickup truck plants down for retooling to make the next generation F-150 with an aluminum body instead of steel. The result was a short supply of the F-150 which is a huge profit generator for the company. Ford sold 1.72 million vehicles globally in the first quarter, a 10% increase from 1.6 million for the same period a year ago.

“1Q 2016 was an absolutely terrific start to the year; an all-time record for Ford,” said CEO Mark Fields of the results that beat Wall Street expectations and increased global share by two-tenths. Pretax profit hit a record $3.8 billion.

North America continues to power profits. Ford earned $3.1 billion which eclipses $1.3 billion last year when F-150 volume was down more than 40% as the Kansas City, Mo., plant worked to return to full production after a lengthy shutdown to prepare for the new model. Ford was also hurting from a shortage of the new Edge crossover while the Oakville, Ont., plant was retooled and began its production ramp-up. Chief Financial Officer Bob Shanks said the full volume of the two vehicles would have increased revenue by a billion dollars. That is all back now and the company reported an operating margin of 12.9% for the quarter, a rarity in the auto industry.

F-150 and Edge are both at full production and Ford also has an updated Explorer on the market. Still to come is the Lincoln Continental flagship sedan and the F-150 Raptor performance pickup and Focus RS.

China also continues to improve for Ford which set out to carve a niche for itself with a full lineup of utility vehicles and while sales in China have cooled–SUVs are in big demand and Ford earned $443 in the world’s largest car market. Ford earned $220 million in Asia Pacific compared with $103 million a year ago.

Ford was losing money in Europe a year ago but fortunes continue to improve. The company earned $434 million in the first quarter compared with a loss of $185 million in the same quarter in 2015.

Ford continues to lose money in South America to the tune of $256 million. It lost $189 million a year ago in a region that continues to be plagued by volatility, inflation, currency devaluation and unrest.

Ford lost $14 million in the Middle East and Africa. Last year the region earned $79 million.

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