CHICAGO Ford Motor Co. is bullish on its performance expectations for the full year and projects strong growth in automotive sales in 2014, particularly in North America.
The Dearborn, Mich.-based automakers third-quarter net income fell 22 percent from a year earlier to $1.27 billion, dragged down by continued losses in Europe, separation costs associated with mass layoffs at its European operations and a lump-sum payment to its U.S. employee retirement plan.
Total revenue in the quarter improved 12.1 percent from a year ago to $36 billion, with gains in every regionincluding Europe.
"North America continues to achieve strong profits and we saw significantly improved results outside North America," said Bob Shanks, executive vice president and chief financial officer. "We substantially reduced our losses in Europe, set a record third-quarter profit in Asia Pacific Africa and saw a $150-million improvement in South America."
Favorable market factors in North America were mostly offset by higher costs, including investments in new products, president and chief executive officer Alan Mulally said during an earnings conference call Oct. 24.
Ford expects vehicle demand to rise along with the U.S. economic recovery, particularly an improvement in the housing market, Mulally said. "Starting with the fundamentals of the recovery, with the housing market improvement and pent-up demand due to the age of vehicles on the road, as we start to satisfy pent-up demand it will be demographics and discretionary income ... (that lifts vehicle sales) to the 16 million to 17 million (unit) range."
Full-size pickup trucks continue to lead sales growth, but most platforms and individual models also are catching the wave.
Full-size truck sales are up by more than 1 percentage point, chief operating officer Mark Fields said during the conference call. "Our performance is very good this year. Transaction prices are at the highest level in the segment. We added a third shift at Kansas City to produce even more (F-series trucks) and we have some opportunities to increase output with line speed and overtime," he said.
"Our approach is to make sure we have an orderly transition from 13 to 14 model years, and ... if the market gets even stronger well react to that with more production," Fields said.