Spurred by profits in North America, Ford Motor Company posted a net income of $1.6 billion in the third quarter, an increase of $0.6 billion from a year ago. Revenue tallied up to $36.5 billion, also up from the same quarter last year.
In North America, Ford saw its pre-tax profits increase of $0.4 billion last year to $1.7 billion. Market share currently sits at 13.5 percent in the region, remaining relatively flat from a year ago. For the full year, Ford expects its operating margin to come in lower than in 2016 due partly to an increase in engineering and products costs for utilities, commercial vehicles, and autonomous vehicles.
Ford’s Asia results were also favorable, with a pre-tax profit of $289 million, up from last year. Ford attributes the success to a reduction in costs and says profit should grow this year compared to last.
Meanwhile, Ford suffered in Europe due to the expensive launch of the Fiesta and residual effects from Brexit. Although it lost $86 million pre-tax, revenue rose due to higher volume, stronger vehicle mix, and better pricing. Ford expects Europe to be profitable for the full year.
Ford also recorded negative pre-tax results in South America and the Middle East & Africa regions. Its South American losses should improve for the full year as the local economy gets better, and numbers should be more favorable in the Middle East & Africa, as well.
In the U.S., Ford increased its transaction prices year-over-year by more than twice the industry average in the third quarter. Meanwhile, incentives rose less than half the industry average as a percent of a vehicle’s total price. The F-Series, the best-selling vehicle over here, experienced a 14 percent increase in sales for the quarter.
“This quarter demonstrates that our team’s focus on fitness is showing early promise,” said Ford CEO Jim Hackett in a statement. “But we also know that we must accelerate that progress in the near term, while taking the necessary steps to fundamentally redesign our business operations to be more fit for the long term.”
Hackett became CEO in May when Mark Fields was ousted. One of Hackett’s top priorities is to combat declining sales by finding the right balance between volume, mix, and price for vehicles. He’s also focused on improving the company culture and loosening the hierarchical structure for quicker decision making. New products will require Ford to increase capital expenditures over the next five years, and although the company is dedicated to electrified vehicles, it will remain heavily invested in gasoline-powered vehicles for the future.
Ford forecasts full-year earnings between $1.75 to $1.85 per share, at the high end of its earlier estimate range.