As expected, it continues to knock the cover off the ball in North America. That's the good news.
In Europe, however, it continues to pile up losses with no end in sight. That's the bad news.
Thus, the bad news offset the good news for the quarter and kept profitability flat year-on-year.
Ford Sees Little Change in Net Income has the morning's good news/bad news story:
"Ford Motor Company reported a flat profit in the third quarter, as heavy losses in Europe continued to undercut its strong performance in the North American market. . . .
The results underscored both Ford’s success in its home market and its festering problems in Europe, where the auto market has fallen to its lowest sales levels in nearly 20 years.
Ford said its pretax profit in North America increased to $2.32 billion in the quarter from $1.55 billion a year ago. The results were driven by the introduction of new vehicles, like the Escape S.U.V., and higher transaction prices.
But its European operations floundered because of lower sales and higher incentives. Ford reported a pretax loss of $468 million in the region, compared to a pretax loss of $306 million in the third quarter last year.
Ford has now lost more than $1 billion in Europe so far this year and has said it expects its full-year loss to top $1.5 billion. Last week, the company said it would close three factories in the region and eliminate 5,700 jobs to better balance production there with shrinking demand for new vehicles.
The company’s chief executive, Alan R. Mulally, said Ford would continue to face stiff challenges in Europe as it restructures.
“While we are facing near-term challenges in Europe, we are fully committed to transforming our business in Europe by decisively matching production to demand, improve revenue through new products and a stronger brand, improve our cost efficiencies and take advantage of opportunities to profitably grow our business,” Mr. Mulally said in a statement. . . .
The healthy profit in North America reflected Ford’s dramatic turnaround in its home market since the financial crisis that crippled the American auto industry in 2008. Unlike its Detroit rivals, General Motors and Chrysler, Ford survived without a government bailout or bankruptcy filing.
Since then, Ford has revamped its product lineup to offer a broader range of smaller, more fuel-efficient models. The company said its operating profit in North America was its highest since 2000, and it forecast similar results through the remainder of the year.
“Ford’s more balanced product mix with a stronger presence in the small car segments enabled the company to operate at highly profitable levels in the North American and Asian markets, whereas the European operations continued to struggle,” said Jesse Toprak, an analyst with the auto research site TrueCar.
Ford ended the quarter with $24.1 billion in automotive cash reserves, an improvement from $20.8 billion a year ago.
The company produced 1.36 million vehicles in the third quarter, about the same number as a year ago. Ford said it will build 1.48 million cars, trucks and S.U.V.’s in the fourth quarter, an increase of 112,000 from the same period in 2011."
Ford is definitely winning in North America.
Look for it to get its act together in Europe as well.
That spells trouble for its competitors, but that's what makes the market work.
And that in turn means better values offered to consumers spending MOM.