Ford Motor Company today announced record third-quarter profits of $2.2 billion on revenue of $32.1 billion. Yet despite positive news company-wide and in North America, Ford's results were still dragged down by disappointing sales in Europe.
The third-quarter profit exceeds Ford's second-quarter profit of $1.8 billion, and also is up compared to $1.9 billion in the third quarter of 2011. Most of the success can be attributed to strong vehicle sales in North America and positive results from Ford Credit.
Within North America, Ford's operating margin was 12 percent -- marking the third straight quarter in which it exceeded ten percent, and up from 8.6 percent in the third quarter of 2011. Ford will announce sales results on November 1, but the company said today it expects that its profit for all of 2012 will be significantly higher than last year. It predicts total U.S. auto industry sales of 14.7 million units this year.
Ford Europe, meanwhile, saw its operating margin drop to a loss of eight percent. The division lost $468 million in the third quarter -- worse than its second-quarter loss of $404 million and down from a $306-million loss in the third quarter of 2012. The grim news is a result of sales in Ford's 19 primary European markets falling 20 percent in the past five years. Ford Europe expects to lose a total of $1.5 billion this year.
While Ford doesn't expect European car sales to improve any time soon, the automaker announced a range of cuts to help improve its profitability there. Ford will close its Genk plant in Belgium by the end of 2014, as part of Europe-wide cuts that will cut 13 percent of Ford's European workforce.
Results were better for Ford Asia Pacific, which posted a profit of $45 million in the third quarter, and in South America, where Ford reported a $9 million profit.