Ford Motor reported a lower quarterly net profit but beat analyst expectations amid greater commodity, engineering and recall expenses, and a drop in automobile sales.
Ford shares were down at $11.54 in early trade.
The No. 2 U.S. automaker, which restated its pretax profit forecast for this year, cautioned investors in late March that higher expenses and lower sales volumes would harm quarterly incomes.
Chief Financial Officer Bob Shanks told press reporters at the company’s headquarters in Dearborn, Michigan, that additional expenses made this the “toughest quarter” for 2017.
Shanks stated Ford’s results for the rest of the year would be “about flat to a bit better” compared to last year.
The company’s outcomes come at a time of unpredictability for the United States car market following disappointing sales in March.
While sales of new automobiles have increased since the end of the Great Recession and hit 17.55 million units in 2016, experts anticipate a minor sales decrease in 2017. Ford stated Thursday it expects industrywide sales to reduce a little this year and in 2018.
Ratings firms have warned of aggravating credit and concerning millions of almost brand-new leased vehicles due to flood the marketplace over the next number of years will depress used-car values and harm U.S. automakers’ sales.
Shanks stated Ford’s own used-car worths at its finance arm were below 7 percent compared with the very same quarter in 2016, however said customers’ credit scores stayed high and we “feel really good about where credit is.”
“Clearly we’re relocating to a different stage of the cycle, however we believe based upon exactly what we understand that we have got it covered,” he stated.
Ford’s expenses during the first quarter were harmed by two recalls in North America, one to replace possibly malfunctioning side door latches and the other for under-hood fire dangers. The company said it expects to invest $295 million to repair those problems.