North America has been Ford's cash cow thanks to F-Series pickup sales. (Joe Raedle / Getty Images)
Dearborn — Ford Motor Co. expects its 2013 profit will exceed the $8 billion pre-tax mark that it posted in 2012, driven in part by a better-than-expected third quarter that included revenue growth of 12 percent and market share gains in all four worldwide regions.
The third quarter marked the 17th consecutive quarter that Ford has posted a profit.
Ford’s net income was $1.27 billion, or 31 cents per share — down $359 million, or 10 cents per share from the same period in 2012.
But excluding special items, which included a $250 million hit related to plant closures in Europe — seen by analysts as a necessity to help turn around Ford’s cash-burning operations there — and another $145 million associated with Ford’s U.S. salaried retiree voluntary lump sum payout, the Dearborn automaker posted a $2.6 billion pre-tax profit, or 45 cents per share. Analysts had expected 38 cents per share.
Revenue totaled $36 billion, up 12 percent.
On Thursday, Ford’s share price momentarily topped $18 for the first time since January 2011; it closed the day at $17.76.
The lion’s share of the profits continued to come from Ford’s North American operations, where the automaker posted a $2.3 billion profit. That’s even more than it earned during the second quarter, despite the fact that because of seasonal factors, third-quarter results are worse than they are in the second.
But the biggest news came from Ford’s other three regional operations, which turned a collective profit for the first time since the second quarter of 2011.
“I think it’s significant or at least symbolic of something significant in the long term,” said Itay Michaeli, analyst at Citi Investment Research, in a telephone interview. “Some investors have said, ‘The one tough part I have is that they only really make money in one region.’ That has increased the risk in the investment.”
Ford’s South American region posted a $159 million profit. The automaker’s Asia-Pacific-Africa region turned a $126 million profit — a third-quarter record — backed by a record 3.7 percent market share.
Ford’s market share in China tied a quarterly record at 4.3 percent, backed by sales of the Kuga compact SUV, EcoSport subcompact SUV and two variations of the Focus compact car.
“The breadth and the depth and the quality of the growth I think is very exciting,” Ford CFO Bob Shanks told reporters Thursday morning.
Europe continued to be Ford’s weak spot, but Shanks said the economic environment is improving. He pointed to various indicators like rising consumer confidence and increasing industrial production as signals that Europe could be headed in a positive direction.
And Ford is already realizing the results of its European restructuring plan, similar to the one implemented in the U.S. during the auto crisis, which right-sized production to better match demand while investing in new vehicles.
“We believe that we have reached a level of stability,” Shanks said. “It’s at the point where we’ll start to see very, very modest growth start to take hold.”
Still, the automaker lost $228 million in Europe during the third quarter. That was less than the $468 million it lost in the third quarter of 2012 and significantly less than the $456 million loss that Michaeli and Citi Investment Research projected prior to the earnings call.
Ford now expects its full-year European losses to be less than in 2012, when the company lost about $1.8 billion.
“I don’t think we’re out of the woods at all,” Michaeli said, referring to Europe. “There’s still a laundry list of issues, but this is clearly some big steps in the right direction.”
In the third quarter, Ford said it settled about $700 million in pension obligations related to its U.S. salaried retiree voluntary lump-sum program, which started in August 2012. Since then, the automaker has settled $3.4 billion and the lump-sum program is about 80 percent complete.