UPDATE: 10/24/2018 19:08 ET – adds details
DETROIT – Poor results in China and other overseas markets contributed to a decline in the net result of Ford Motor Co. by 37 percent in the third quarter, and the automaker has reversed its target to increase its global profit margin by 2020 to 8 percent.
But the chief executives of the automaker continued to pressure investors on Wednesday, as the restructuring plan from CEO Jim Hackett of $ 11 billion begins.
Ford reported Wednesday that its net profit fell to $ 991 million in the quarter, although sales increased 3 percent to $ 37.6 billion, driven by vehicles with higher profits in North America, including the redesigned Expedition and Lincoln Navigator SUV & # 39; s. Ford's earnings before interest and taxes fell 27 percent to $ 1.7 billion.
"We had an extremely productive quarter in terms of placing building blocks," Hackett said during a conference call. "We tackle real problems and we quickly switch to a redesign of the company to support our strategy."
But Ford said its challenges abroad, as well as higher costs and insecurities that cloud the entire automotive industry, means that it no longer predicts that the target margin rate of 8 percent it had set previously would be met. CFO Bob Shanks refused to offer an alternative timetable to reach that threshold.
"We currently see no way to get there," Shanks told analysts. "Certainly, we are trying to get there as soon as possible. I'm not going to put a schedule on it because I do not want to go back and it has to change. "
Hackett and his leadership team have been criticized by Wall Street analysts who have asked for more clarity about his plan. Hackett said Wednesday that the details would be shared over time.
"We are fully committed to sharing details as soon as we can, but I can not allow ourselves to be the process," he said. "The need to keep our stakeholders informed is the priority for me and the entire company."
Ford's earnings in the quarter were driven by North America, where profits rose 7.5 percent to $ 1.96 billion. The profit margin for the region was unchanged compared to the same period a year ago by 8.8 percent.
The automaker said its market share in the region declined slightly as it halted sedans, but the market share for its profitable F-series pickups rose.
Hackett said these results "show the early evidence that fitness actions are now taking hold".
Ford shares sank last Wednesday and closed at $ 8.18 per share, but rose 5.5 percent to $ 8.65 at 17:50. ET in trade after closing time, after the publication of the profit.
Ford recorded lower revenue, market share and sales in China, the world's largest vehicle market.
Ford lost $ 208 million in Asia Pacific in the quarter. Excluding China, it made $ 170 million in the region with profit margins of 9 percent.
The automaker suffers from a lack of new product that has led to a sharp fall in sales. Sales of new vehicles dropped 43 percent in September compared to a year earlier and fell by 30 percent to the first nine months of the year.
Ford said Tuesday that it would divide its Chinese operations into an independent unit and appoint Anning Chen, a former Ford manager with 25 years of industrial experience, to become CEO of Ford China on November 1st.
Ford's profit margin for the quarter was 4.4 percent, 1.9 percentage points lower than the same period a year ago.
The company lost $ 152 million in South America, down 1 percent, and lost $ 245 million in Europe. It earned $ 47 million in the Middle East and Africa.
Ford said that its mobility unit lost $ 196 million in the second quarter, $ 124 million more than the same loss a year ago. The unit is in a heavy investment phase with little compensating income.
Ford Motor Credit earned $ 678 million, the best quarterly results since 2011.
Ford's net income was 29 cents per share, 1 cent higher than the consensus estimate on Wall Street.
The company once again confirmed its target for the full year of adjusted earnings per share from $ 1.30 to $ 1.50. It had previously reduced its guidance from a range of $ 1.45 to $ 1.70 per share, citing problems in Europe and China.