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Ford Motor Co.’s third-quarter earnings fell more than 56 percent to $957 million, with the automaker saying Thursday that the drop was driven by recall costs, reduced dealer inventory and changes in the mix of the F-150 in North America.

While the Dearborn automaker expects to post a 2016 profit that is the second best since 2000, Ford plans to reduce production in North America 12.5 percent during the fourth quarter to match inventory with consumer demand. The company also plans more plant downtime, including two weeks by the end of the year at its Michigan Assembly Plant in Wayne that builds the Focus and C-Max, as it sees the U.S. sales environment plateauing.

In the U.S. market, “Our view is the industry is at a relatively strong level, but the retail market is softening and the pricing environment is getting tougher,” Ford President and CEO Mark Fields told analysts in a call.

Ford earned 24 cents a share in the quarter, down from $2.19 billion in net income and 55 cents a share earned in the same quarter a year ago. Ford slightly beat analysts’ estimates with adjusted earnings per share of 26 cents versus analyst expectations of 20 cents.

Adjusted pre-tax profit totaled $1.4 billion, up from guidance of $1 billion. The difference was caused by the timing of certain costs, Ford said.

“For the full year, we continue to expect to deliver one of the best profit years ever for the company,” Fields said.

Fields reaffirmed the company’s expectations to earn an adjusted pre-tax profit of about $10.2 billion in 2016.

Ford stock closed down 14 cents for the day, off 1.2 percent, to finish at $11.74 per share.

“As much as it’s not fair, investor sentiment is not favorable on OEMs (original equipment manufacturers) these days despite fairly strong results,” Brian A. Johnson, a Barclays Capital Inc. analyst, wrote in a note to investors Thursday.

Revenue totaled $35.9 billion, down 6 percent from a year ago.

The biggest profit drop was in North America, where pre-tax earnings fell nearly 57 percent to $1.26 billion, down from a record $2.9 billion a year ago. And that decline “is really what’s driving the company change,” Ford Chief Financial Officer Bob Shanks said.

North America profit margin fell to 5.8 percent from 12.3 percent a year ago, its lowest level since the fourth quarter of 2011. Wholesale volume fell 11 percent and North America revenue dropped $1.9 billion to $21.8 billion.

Shanks said the North America profit decline is related to a door latch recall, costs and volume from its launch of a new aluminum-bodied Super Duty and “normalization” of sales mix on the popular F-150. A year ago, Ford was building stock of the trucks as it came out of a launch and most sales were to retail customers. During the third quarter, the company reduced dealer inventory of the F-150, Super Duty and cars, Shanks said.

“This year we have a stock decline as we’re adjusting our production to demand,” he said. “We also have normal levels of fleet vs. retail sales.”

Last month, Ford announced a recall for faulty door latches and said in a regulatory filing that it would take a $640 million hit to earnings. The recall cost came in about $40 million less, at about $600 million, Shanks said.

Ford lowered its 2016 profit estimate from $10.8 billion because of the recall. Last month, the carmaker said it is forecasting lower profits for 2017 as it continues to invest in emerging mobility business opportunities, but expects results to improve in 2018.

Ford said Thursday it plans to take one of three crews down next week that build the F-150 at its Kansas City Assembly Plant, as it continues to match production to demand. Fields said additional downtime in the fourth quarter is planned, and relates mostly to the Fusion, Focus and Escape.

Fields said the company is taking actions to protect its profit margins and it wants to be competitive with market share. Ford feels good about the full-size pickup market, but said it has seen some retail demand weakening .

“That’s why we’re being proactive around our stocks,” he said. “We want to protect that brand, we want to protect that franchise and we’re going to protect the residual values for our customers.”

Earlier this month, Ford confirmed downtime was slated at five North American plants to reduce inventory . That included its Flat Rock Assembly Plant, which builds the Mustang and was halted for a week; Kansas City ; an assembly plant in Louisville, Kentucky, that builds the Ford Escape and Lincoln MKC and had two weeks of down time scheduled; and two plants in Mexico that make the Fusion and Lincoln MKZ sedans and Fiesta subcompact.

Shanks said Ford plans for more reduced production in the fourth quarter. North America production is expected to drop by 100,000 vehicles to 700,000.

In Europe, Ford posted pre-tax profits of $138 million, its best third quarter there since 2007, and also made a $131 million pre-tax profit in Asia Pacific and $552 million pre-tax for its financial services segment. It lost $295 pre-tax in South America and $152 million pre-tax in the Middle East and Africa.

Shanks said the company expects continuing costs from Brexit, following the United Kingdom’s June vote to leave the European Union. Ford said at its second-quarter earnings that it expected Brexit could cost Ford $145 million in the second half of the year and about $200 million in all of 2016 and $600 million in 2017, as the pound sterling continues to weaken.

Shanks said Ford raised prices 2.5 percent in the United Kingdom as of Sept. 1 in response to the lower pound. General Motors Co. also boosted prices by the same amount beginning Oct. 1. Shanks said Ford started reducing dealer stock in the third quarter and that more actions would be coming in the fourth quarter.

“We think over time that will start to have the effect in reducing industry demand,” he said.

Ford is the last of the Detroit Three automakers to post its third quarter results. GM on Tuesday reported record profits for the quarter of $2.77 billion and Fiat Chrysler Automobiles posted a $659 million profit. GM stock fell 4 percent Tuesday after posting record results.

mburden@detroitnews.com

(313) 222-2319

Ford announces Smart Mobility VP

Ford has hired Laura Merling to join the automaker’s Smart Mobility LLC subsidiary as vice president of autonomous vehicle solutions.

Merling, a 20-year Silicon Valley veteran, will work in Palo Alto, California, and will report to Jim Hackett, chairman of Ford Smart Mobility.

Ford recently announced plans to roll out a fully self-driving vehicle for ride-sharing or ride-hailing purposes by 2021. Merling will lead commercialization of the company’s autonomous vehicles. Ford praised her experience in strategy and innovation within startups and corporate settings. She previously ran her own consultancy firm.

Melissa Burden

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