Ford Motor Company has reported 2012 first quarter pre-tax operating profit of $2.3 billion, and net income of $1.4 billion, led by a strong performance in North America.
The overall results are down from 2011 first quarter pre-tax operating profit of $2.8 billion, and net income of $2.6 billion, partly due to weaker economic conditions in Europe, and partly due to tax considerations and special charges, such as buyouts of hourly workers in the US in accordance with the 2011 UAW agreement.
Total Automotive pre-tax operating profit in the first quarter was $1.8 billion, a decrease of $294 million from first quarter 2011. Ford explains the decrease as being due to higher costs and unfavorable exchange rates, partially offset by higher net pricing and lower net interest expense.
Total vehicle wholesales in the first quarter were about 1.4 million units, a decline of 45,000 units from first quarter 2011. Lower wholesales in Europe and Asia Pacific Africa were offset partially by higher wholesales in North America and South America.
North America reported a pre-tax operating profit of $2.1 billion in the first quarter of 2012, compared with $1.8 billion a year ago—the highest quarterly profit for the region since 2000, when the company began to identify North America as a separate business unit.
“Our team delivered a solid performance during the first quarter, with particularly strong results in North America, despite a challenging global external environment,” said Alan Mulally, Ford president and CEO. “We remain focused on investing for future growth and developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value.”
As part of the company’s long-term strategy to de-risk its global funded pension plans, Ford said it will offer the option of a voluntary lump-sum pension payment to around 90,000 eligible US salaried retirees and former employees, in settlement of its pension obligations.
This is the first time a program of this type and magnitude has been offered by a US company for ongoing pension plans. “Continuing to improve the underlying strength of our balance sheet remains a fundamental part of financing the One Ford plan,” said Bob Shanks, Ford executive vice president and chief financial officer. “Providing the option of a lump-sum payment to current salaried US retirees and former employees will reduce our pension obligations and balance sheet volatility.”
