Ford Motor Company today announced its 11th consecutive quarter of pre-tax profits, recording $2.3 billion in profits and $1.4 billion in income for the first quarter of 2012. Though impressive, those figures are down slightly compared to the first quarter of 2011, when Ford reported $2.6 billion in net income and $2.8 billion in pre-tax profits.
In concert with the strong earnings, Ford announced that it would offer a lump-sum pension payment to eligible employees. Available to about 900,000 salaried U.S. retirees and former employees, the lump-sum option would mean Ford no longer has any pension obligation to that employee. If taken, the payouts would start later this year and are funded by existing pension plan funds.
In the first quarter, Ford paid its first quarterly dividend since 2006, and announced that it also plans to pay a second-quarter dividend to shareholders this summer. Both dividends were valued at five cents per share.
Broken down by region, Ford’s profit in North America was $2.1 billion, up from $1.8 billion in the first quarter of 2011. That’s the highest quarterly profit for North America since Ford began reporting profit by region in 2000. Much of the profit increase was driven by higher industry-wide car sales, and higher transaction prices for new cars. Europe, however, suffered a loss of $149 million, as compared to a profit of $293 million last year. Ford attributes that to declining vehicle sales in Europe, spurred by continuing economic downturn, as well as reduced demand for car parts and accessories.
Ford says it predicts that the U.S. market will sell between 14.5 and 15 million cars this year, but Ford’s market share may drop compared to 2011 because the company’s production capacity may lag behind actual vehicle demand. Operating profits in the second half of this year are expected to be higher than in the first two quarters as new vehicles launch and Ford increases production capacity.