Ford Motor on Thursday posted a better-than-expected first quarter mainly because of strong pickup truck sales in its major U.S. market and stated it was more confident in its forecast 2019 would bring improved results than 2018.
The first-quarter results sent boost in Ford’s shares about as much as 8 percent in after-market trading.
CFO Bob Shanks informed reporters at company headquarters located in suburban Detroit that Ford has more confidence its 2019 results will be better than 2018 but stated it is in a “volatile environment with very strong competition.”
Shanks added the first quarter would probably be automaker’s best for the year.
Ford is reshaping its business, which consists of cutting costs and overhauling its product lineup in major global markets, consisting of China and Europe.
Basically, all of Ford’s profit in the quarter was generated in the U.S. market, because of a strong performance by its best-selling F-Series pickup trucks and its new Ranger midsize pickup. The company lost cash in most other markets, but less than it had expected.
Two of every five full-size pickups sold in the US in the first quarter were Ford F-series, with segment-leading transaction costs averaging just below $48,000, according to Jim Farley, president of New Businesses, Technology & Strategy.
The company’s decision to eliminate most of its unprofitable passenger cars in the U.S. market meant that its revenue increased 2 percent regardless of a 14 percent drop in wholesale unit sales.
Shanks stated that move was worth “hundreds of millions of dollars” and assisted in driving pretax margins in North America to 8.7 percent, increasing nearly a point from a year ago.
Ford also made a small profit in Europe and the profit at its funding arm also grew. But the automaker’s worldwide market share dropped to 5.9 percent from 6.5 percent as it lost ground in every significant market except North America.
“The business is now turning in a positive direction,” Shanks stated. But “it’s the beginning of the game, it’s not game over,” he said.
The automaker is having a hard time in China, where previously this month, Ford stated it planned to launch over 30 new models over the next three years.
China unit sales dropped 48 percent in the quarter, but Ford stated higher-priced products helped deliver a smaller loss compared to the same quarter in 2018.