Dăncilă Mircea Gheorghe CIG. Anul I. Grupa I.

Ford's profit falls 39% in first quarter

Ford Motor Co.'s worldwide sales rose in the first quarter, propelled by growing

strength in Asia and Europe. But weakness in North America dragged down the

automaker's profit.

Its earnings missed Wall Street's expectations, while revenue beat them. Ford

shares fell more than 3%, the most in three months.

Also Friday, Chief Executive Alan Mulally, said there was no change in the plan

for him to stay with the Dearborn, Mich., company at least through the end of this year.

Ford's first-quarter net income fell 39% to $989 million, or 24 cents a share, down

from $1.64 billion, or 41 cents, a year earlier.

Excluding a one-time charge of $122 million for plant closings in Europe, Ford

earned 25 cents a share. That was far short of Wall Street's expectations.

Revenue rose slightly to $35.9 billion, beating analysts' expectations of $34.2

billion. Worldwide sales were up 6% to nearly 1.6 million vehicles.

Ford's U.S. sales fell 3% to 580,260 in the January-through-March period, the

victim of bad weather and low buyer interest in smaller, fuel-efficient cars such as the

Focus and C-Max hybrid. While the F-Series pickup continued to see gains, sales of other

key vehicles such as the Fusion sedan and Escape SUV were down.

Ford's chief financial officer, Bob Shanks, said the company had forecast lower

sales in North America this year as it launches 16 new vehicles in the region.

But Ford made up for those losses elsewhere. In China, first-quarter sales soared

45% to 271,321 vehicles. And European sales, long a sore point for Ford as Europe went

through a recession, rose 11% to 326,000.

Ford's Asia Pacific operations continued to thrive under the company's ambitious

expansion plans, but Ford sputtered in North America and lost money in South America

and Europe. A newly created Middle East and Africa region was profitable.

The company also took a $400-million charge for warranty reserves and repair

costs. Shanks said Ford regularly forecasts what its future warranty and recall costs will

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be and sets aside money for them. The company said those costs have been rising, so it

decided to add $340 million to its reserves for vehicles from the 2008 through 2013

model years. Ford said the decision was not related to the spate of first-quarter recalls at

rival General Motors Co.

Ford enjoyed one of the best years in its history in 2013, with a pretax profit of

$8.56 billion. But it had warned that this year would be leaner as it launches a record 23

vehicles worldwide and seven plants, including four in China. The company said it still

expects a full-year pretax profit between $7 billion and $8 billion.

Ford shares slid 3.3% to $15.78 on Friday. The stock has climbed 2.3% this year

after rising 19% last year.

Source: http://www.latimes.com

Unknown words:

to propel = a propulsa, a stimula

to drag down = a trage în jos

earnings = câștig, salariu

revenue = venit, percepție

charge = taxă, sarcină

plant = uzină

to forecast = a prezice, a prevedea

to soar = a urca, a crește

to thrive = a prospera, a reuși

expansion = expansiune, extindere

to sputter = a se bâlbâi

warranty reserves = rezerve de garanție

pretax profit = profit înainte de impozitare

leaner = mai flexibil, mai suplu

slid = a aluneca, a trece pe nesimțite

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Summary:

Ford has reported a 39% drop in first-quarter profits as its performance in the

North American market weakened.

The carmaker earned $989m in the January to March period, down from $1.64bn a

year before.

Overall revenue for the first quarter rose slightly to $35.9bn, and it sold 1.6

million vehicles in the three months period, a rise of 6%.

Chief financial officer Bob Shanks said the boosting of such funds was normal

across the car industry, as vehicles became more complex.

Ford said it had increased its market share in China, and in the Asia Pacific region,

where operations continued to thrive under the company`s expansion plans.

Anyway, the company has failed in North America and recorded loses in Europe

and South America. The good news came from the newly created Middle East and Africa

region, which was profitable.

Ford set aside $400m to boost its reserve fund that deals with vehicle warranty

issues. The company also is launching a record 23 new vehicles globally in 2014 and

seven more plants, including four in China.