Ford's profit falls 19 percent
Net income down, but excluding special charges, auto manufacturer posts earnings above estimates.
July 19, 2005: 7:34 AM EDT
DETROIT (Reuters) - Ford Motor Co. reported a 19 percent drop in second-quarter profit Tuesday as it continued to lose vital U.S. market share, but earnings were substantially higher than analysts expected.
The second-largest U.S. auto manufacturer, which has warned that its automotive operations may not be profitable this year, reported a loss for its automotive operations for the quarter as its credit arm continued to drive results. Ford affirmed its full-year earnings outlook.
Ford's (down $0.07 to $10.93, Research) second-quarter net income fell to $946 million, or 47 cents a share, from $1.17 billion, or 57 cents, a year earlier.
Excluding special charges too, earnings were also 47 cents a share. On that basis, Wall Street analysts, on average, were expecting second-quarter earnings of 33 cents, according to Reuters Estimates.
Ford said charges related to a bailout of former parts subsidiary Visteon Corp. (down $0.16 to $7.92, Research) and job reduction programs reduced earnings per share by 18 cents. But the charges were fully offset by a one-time adjustment in the company's taxes.
The lower earnings follow a 13-month decline in the company's U.S. vehicle sales, including a dramatic slowdown in sales of its profitable mid- and large-size sport utility vehicles amid high gasoline prices.
Revenue rose to $44.54 billion in the second quarter from $42.87 billion a year ago.
Ford said its core auto operations posted a pretax loss of $245 million before taxes and excluding charges, while its finance arm contributed net profit of $740 million.
Including special charges, Ford said its auto division posted a loss of $571 million.
Ford, which last month had slashed its 2005 earnings outlook for the second time this year, affirmed its outlook for full-year earnings of $1 to $1.25 per share.