Ford reported a better-than-expected quarterly net profit on Thursday, driven largely by U.S. sales of its high-margin pickup trucks, and it raised the low end of its full-year earnings forecast.
Ford’s positive results came despite an overall decrease in vehicle sales to U.S. dealers.
A large part of the company’s profits came from its F-Series pickup trucks, which have been the best-selling vehicle in North America for decades. Ford said the average transaction price for its trucks rose $2,800 to $45,400.
Ford said its North American margin rose to 8.1 percent from 5.8 percent a year earlier. Earlier this week, GM reported a third-quarter margin for North America of 8.3 percent.
Apart from North America, the only other region that was profitable for Ford was Asia Pacific, driven by sales increases outside China. Ford Chief Financial Officer Bob Shanks said sales volumes, market share and margins were all down in China.
He said its European operations would return to profitability in the fourth quarter and for the full year.
New Chief Executive Officer Jim Hackett is under pressure to please Wall Street. Following his first 100 days in office, Hackett’s overarching message to Wall Street focused on plans to slash $14 billion in costs over the next five years, and shift capital investment away from sedans and internal combustion engines to develop more trucks and electric and hybrid cars.
Wall Street has been underwhelmed, particularly by Hackett’s caveat that most of the savings will not show up on Ford’s bottom line until 2019 and 2020.
By comparison, main rival GM has impressed Wall Street with promises to put the first self-driving vehicles into commercial service before 2020 and introduce 20 electric vehicles by 2023.
Year to date, GM’s stock is up nearly 30 percent, while Ford is down almost 1 percent.
When asked by reporters about the flagging stock, CFO Shanks said Ford has a “really good plan” for electric vehicles and self-driving car technology.
“I think the market will reward us,” he said.
Ford said it had lower engineering, advertising and promotion expenses than in the third quarter.
The second largest U.S. automaker posted a quarterly net profit of $1.56 billion, or 39 cents per share, up more than 60 percent from $960 million, or 24 cents, a year earlier.
Excluding one-time items, Ford reported earnings per share of 43 cents, above Wall Street expectations of 32 cents.
Revenue rose to $36.45 billion from $35.94 billion a year earlier.
Ford said it now expects full-year earnings in a range of $1.75 to $1.85 per share. Previously it had looked for $1.65 to $1.85.
In premarket trading, Ford shares were up 1.7 percent at $12.24.