Ford Motor third-quarter profit misses estimate, shares drop
By Bernie Woodall and Joseph White
DETROIT (Reuters) - Ford Motor Co (F.N: Quote) reported sharply higher quarterly profit on Tuesday, driven by its record quarterly performance in North America, but the automakers' shares fell 5 percent after its results fell short of Wall Street estimates.
Ford executives also cautioned that year-end sales promotions could cut into North American profit margins during the current quarter. Ford has told dealers in the United States that it plans next week to launch a new drive to boost sales during the last two months of the year. The new "Friends and Neighbors" program would offer vehicles to all buyers at the so-called X plan price, which is usually a small markup above the dealers' invoice price, according to people familiar with the program. X plan prices are usually limited to people with business or personal connections to Ford or its employees.
A Ford spokesman declined to comment.
Net income rose to $1.9 billion in the third quarter from $1.1 billion a year ago. After taxes, earnings excluding one-time items were 45 cents a share, one penny short of the consensus analyst estimate. The company said the shortfall was due to taxes that came in higher than analysts expected.
Ford shares fell 79 cents to $14.89 on the New York Stock Exchange.
Ford and its Detroit-based rival, General Motors Co (GM.N: Quote), both earn the bulk of their profits selling trucks and sport utility vehicles in the United States. The average transaction price for an F-series truck rose about $2,000 to $42,000 in the latest quarter, Ford Chief Financial Officer Bob Shanks said.
Of Ford's $35.8 billion in automotive revenue, 66 percent was derived from North America in the quarter.
Ford and the United Auto Workers will soon begin contract negotiations in which the union is expected to push for a greater share of profits. Continued...