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Ford Motor Company’s Earnings Slide 36 Percent in First Quarter

Daimler, FiatChrysler are on the upswing

Ford Motor Company posted earnings of $1.6 billion in the first quarter of 2017, off more than one-third from last year’s record first quarter of $2.5 billion. The automaker blamed higher costs due to such factors as increased price of steel and other commodities, plus lower volume and an unfavorable exchange rate, higher warranty costs and new product development. Ford singled out its Lincoln division, F-150 and Super Duty as contributing to higher transaction prices in the U.S. market and helping to deliver a still-healthy profit.

Transaction prices for its new cars and trucks rose $1,971 year-over-year, according to Ford, compared with an industry average increase of $506.

Revenues totaled $39.1 billion for Q1 ’17. Ford’s adjusted pre-tax profit of $2.2-billion (using non-Generally Accepted Accounting Principles for this specific item) was down from $3.8 billion in Q1 ’16.

2018 Lincoln Navigator front three quarters

Mark Fields, president and CEO singled out such “investments in Ford’s future” as “the all-new Expedition and Lincoln Navigator [and] our investment in Argo AI” as expenditures that will assure a good financial future for the Ford Motor Company.

But the contrasts between Ford, which released its Q1 earnings report Thursday, and Daimler AG, which released its Q1 report Wednesday, illuminate the differences between a commodity automaker and one that deals primarily in luxury vehicles.

Mercedes Benz Concept A Sedan front side motion view

Ford delivered 1.7-million vehicles globally in the first quarter, while Daimler delivered 754,300, of which 568,100 were Mercedes-Benz cars. Compared with Ford’s Q1 ’17 revenue, up 4 percent over Q1 ’16 to $39.1 billion, Daimler’s net revenue was up 11 percent, to 38.8 billion euros, or $42.2 billion, based on Thursday’s exchange rate. Ford’s Q1 net income of $1.6 billion compares with Daimler’s Q1 net of $3 billion, double of what it earned a year earlier. [Hat tip to John McElroy for making this sort of comparison a regular feature of Autoline Daily.]

2018 Jeep Grand Cherokee Trackhawk front view 02

FiatChrysler also released its Q1 earnings report on Wednesday. CEO Sergio Marchionne’s strategy of abandoning the commodity sedan business in favor of trucks, sport/utilities and Alfa Romeos is beginning to pay off. FiatChrysler shipped 1.1-million units globally for the quarter, and posted net revenues of 27.7-billion euros ($30.1 billion, Thursday), up 4 percent, adjusted earnings before income taxes of 1.5-billion euros ($1.6 billion), up 11 percent and net profit of 0.6-billion euros ($0.7-billion) up 34 percent.

General Motors releases its Q1 earnings report Friday. As is tradition on Wall Street, shares in Ford, FiatChrysler and GM all were down by noon Thursday, as was Daimler, on the Frankfurt exchange. Despite Consumer Reports’ downgrade of ratings for its cars, Tesla was up 0.83 points, to 311.15.

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2017 Ford F-150

2017 Ford F-150

MSRP $34,955 XL 2WD Long Bed SuperCrew Cab

EPA MPG:

18 City / 24 Hwy

Towing (Max):

9,100 lbs.

Payload (Max):

1,910 lbs.