Ford Motor Company announced that it has delivered its 12th consecutive quarterly pre-tax operating profit. It has been achieved through the profits made by Ford North America and the continued strong performance from Ford Credit.
"The Ford team delivered another solid quarter driven by the strength of Ford North America and Ford Credit," said Alan Mulally, Ford president and chief executive officer. "We remain absolutely committed to continuing to make progress on our One Ford plan, including dealing decisively with near-term challenges, investing for future growth, and developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value."
The company reported a pre-tax operating profit of $1.8 billion and net income of $1 billion for the second quarter of this year. Although it may seem a hefty profit for them, it shows that their sales profit plummeted down by 58% as compared to last year's sales.
The decrease in total Automotive pre-tax operating profit and operating margin was more than explained by lower results at Ford Europe, Ford South America, and Ford Asia Pacific Africa.
The company recognizes the seriousness of the situation in Europe, and views the challenges the industry faces as more structural than cyclical in nature. Given the deteriorating external environment in Europe, Ford now expects its full year loss in Europe to exceed $1 billion. The magnitude of this loss will be affected by a number of factors, including the overall economic environment, competitive actions, and Ford's response to these developments.
"We have faced challenging situations in other parts of the business before, and successfully addressed them through our One Ford plan," said Bob Shanks, Ford executive vice president and chief financial officer. "We will continue to use our plan as the guide to address challenges and opportunities in our valued European operations.
The company's outlook for full year North America 2012 profits remains unchanged. Ford expects significantly higher pre-tax operating profit and margin compared with 2011, as consumers continue to respond to the company's strong product line-up, including the recently-launched all-new Escape and the all-new Fusion launching in the second half of this year.