Ford quarterly profit drops almost 26% due to $1B write-offs for canceled electric SUV
DETROIT (AP) — Ford's third-quarter net profit fell nearly 26% as the company took $1 billion in accounting charges to write down assets for a canceled three-row electric SUV.
The Dearborn, Michigan, company said after financial markets closed on Monday that it made $892 million from July through September, compared with $1.2 billion it made a year earlier.
Excluding the one-time items, Ford made an adjusted pretax profit of $2.6 billion, or 49 cents per share. That beat analyst estimates of 46 cents, according to FactSet.
Revenue rose 5.5% to $46.2 billion, also beating Wall Street predictions.
CEO Jim Farley said in a statement Ford has taken tough actions to give it advantages over competitors. The accounting charge and cancellation of the electric SUV were announced in August with a change in strategy toward lower-cost EVs.
Sales in the U.S., Ford's most profitable market, rose just under 1% during the quarter to about 500,000 vehicles.
Ford reduced its full-year pretax income guidance to $10 billion at the low end of the $ 10 billion to $12 billion it expected at the end of the second quarter.
Chief Financial Officer John Lawler told reporters Monday that the company has removed $2 billion in material, freight and labor costs this year, but that was offset by inflation at its Turkish operations and only a slight reduction in high warranty costs to fix quality problems.
“That's why we're at the lower end of our overall guidance,” he said.
He said Ford is focused on reducing warranty and other costs, which will show up in later quarters.
The company's plans are working, as evidenced by 10 straight quarters of revenue growth.
Shares of Ford fell 5% in trading after Monday's closing bell.
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