Ford raises annual profit forecast

Ford truck Ford is benefiting from a strong home market

Ford has raised its profit forecast for the year amid continued strength in its home market.

Previously the company said that profits this year would match last year's, but Ford now expects to exceed the $8bn made in 2012.

Third quarter profit fell 22% to $1.27bn (£780m), but that included a $250m charge to reorganise its business in Europe.

Ford's North American unit reported a profit of $2.3bn for the third quarter.

In a statement with the results, Bob Shanks, chief financial officer, said: "We substantially reduced our losses in Europe, set a record third quarter profit in Asia Pacific Africa and saw a $150m improvement in South America."

Losses in Europe narrowed to $228m in the third quarter, an improvement on the same quarter in 2012 when it lost $470m.

Ford Motor Co.

Last Updated at 20 Oct 2014, 16:00 ET *Chart shows local time Ford Motor Co. intraday chart
price change %
14.17 +
+0.15
+
+1.07

According to Mr Shanks, car sales in Europe will see "very, very modest growth" in the near term.

Overall sales in the third quarter rose 12% to $36bn.

Ford's business in North America has been helped by strong sales of its very profitable pick-up trucks.

Ford has been selling more than 60,000 of its F-series truck every month for the past five months, around a 10% improvement on 2012.

Ian Henry, director at AutoAnalysis, said: "At the moment it is quite unusual for a volume car manufacturer to upgrade [its profit forecast]."

In a difficult economic climate, consumers tended to either opt for "better-value brands", such as Hyundai or Dacia, or spend the extra cash on premium brands, he said.

Mr Henry said this meant "volume car" manufacturers, such as Ford, Fiat, or Vauxhall, were typically not so popular.

"Ford must be pretty confident," he added.

Alan Mulally

Speculation has surrounded Ford's chief executive Alan Mulally, who has reportedly been talking to Microsoft about a possible move to replace outgoing chief executive Steve Ballmer.

But when asked about the matter at Ford's press conference, Mr Mulally said: "We don't comment on the speculation."

Mr Mulally said the company's plan to keep him as chief executive until the end of 2014 was unchanged.

He has been running the auto maker since 2006 and is the third-longest serving chief executive in Ford's history, after Henry Ford I and Henry Ford II.

He has received praise for helping Ford to avoid the government bailouts needed by its competitors General Motors and Chrysler in 2009.

More on This Story

Global Car Industry

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    PUBLIC SECTOR FINANCES Via Twitter

    BBC Newsnight's economics editor Duncan Weldon tweets: "Unless the exchequer gets a huge self assessment bumper in January it looks like borrowing will be up this financial year on last."

     
  2.  
    PUBLIC SECTOR FINANCES 10:12: Via Email

    IHS Global Insight economist Howard Archer has a different take on the borrowing figures. He says: "The government's current fiscal problems largely reflect the fact that much weaker-than-expected earnings growth has limited income tax receipts, along with a large number of people now being in low-paid jobs or self-employed."

     
  3.  
    PUBLIC SECTOR FINANCES 10:00: Via Email

    Here's the line from the Treasury. It says: "We have seen stronger growth in receipts this month [that's true enough; income tax rose £200m, or 2.2%, to £10.7bn] but as today's figures show, the impact of the great recession is still being felt in our economy and the public finances. At the same time, we have to recognise that the UK is not immune to the problems being experienced in Europe and other parts of the world economy."

     
  4.  
    09:48: PUBLIC SECTOR FINANCES
    Public borrowing graph

    In the month of September itself government borrowing stood at £11.8bn. That's an increase of £1.6bn compared with the same month a year ago. We await the usual email from the Treasury telling us that income tax will be back-loaded into the year. But the Chancellor at this point looks increasingly likely to miss his £95.5bn borrowing target (as the chart above shows) for the financial year. Don't forget on Monday the FT reported that Treasury Secretary Danny Alexander told his colleagues in the Cabinet there was no money for any tax giveaways in this year's Budget and the Office for Budget Responsibility last week warning about income tax receipts.

     
  5.  
    09:33: PUBLIC SECTOR FINANCES

    Public sector net borrowing excluding public sector banks from April to September 2014 was £58bn, an increase of £5.4bn compared with the same period a year earlier, official figures show.

     
  6.  
    09:23: ASOS SHARES
    ASOS share price graph

    ....have leapt this morning after the publication of its annual results. The online retailer, which had warned on its profits on three occasions this year and suffered from a fire in one of its warehouses over the summer is up 17% to 2,275p.

     
  7.  
    09:14: TESCO PROFITS

    ...are not published until Thursday, so don't worry - you're not in a time warp. But the drip feed of information may have started already. HSBC analysts David McCarthy has put out a note today in which he says the supermarket behemoth will need to invest £3bn in its customer offer to achieve a turnaround. But he says most of that could be self-funded. Mr McCarthy adds: "Tesco has been going wrong for six years or more and it could take as long to put things right as it took to go wrong".

     
  8.  
    08:58: EUROSTAR GROWTH
    the new eurostar e320 train

    Eurostar has reported a 3% growth in passengers to 2.7 million for the three months to 30 September compared with a year earlier as well as 2% growth in revenue to £211m. Just last week the government announced its intention to sell its 40% stake in the firm it jointly owns with the French. Under the plan the government hopes to raise about £20bn from corporate and financial asset sales by 2020. Eurostar celebrates its 20th birthday on November 14th. It will unveil its new fleet (see above) to mark the occasion.

     
  9.  
    08:46: MARKET UPDATE

    Markets are down again today. The FTSE 100 in London fell 0.35%, the Dax in Frankfurt declined 0.31% and the French CAC dropped 0.11%.

    • ARM Holdings led the gainers up 2.5%
    • Reckitt Benckiser led the losers down 2.4%
    • Whitbread fell 2.2%
     
  10.  
    08:36: BAE BUYER

    BAE Systems continues its movement into cyber security, stumping up £144m for Perimeter Internetworking Corp, which trades as SilverSky, a cloud security firm. The purchase will add to earnings in three years, says the firm

     
  11.  
    08:24: TOTAL SHARES

    Shares in French oil firm Total are understandably lower this morning following the death overnight of the company's widely respected chief executive Christophe de Margerie in a plane crash in Moscow. Total has opened down nearly 3% to €42.94.

     
  12.  
    08:12: WHITBREAD
    General view of cup from a Costa Coffee shop,

    Revenue for the owner of Costa Coffee and Premier Inn was up 13% to £1.29bn for the six months ended 28 August. Whitbread chief executive Andy Harrison said: "The trading momentum of our strong first half performance has continued into the first few weeks of the second half and positions Whitbread well to deliver full year results in line with expectations."

     
  13.  
    08:00: GKN RESULTS

    GKN, which makes parts of planes and cars, said sales fell of the third quarter - that's July to September - but profit rose. A stronger pound than last year caused much of the lost revenue. For the rest of the year, the motor and aerospace market will grow, while agriculture "looks set to continue its recent decline," it says.

     
  14.  
    07:50: ARM CHIPS BBC Radio 4

    Simon Segars the boss of chipmaker ARM is on the Today programme. He says lots of companies license his firm's tech so he's not worried about competition from the likes of Intel, which is now targeting ARM's market. "Competition is a good thing," he says. He adds: "History has shown the technology solution that we produce is the one that goes into most devices. Virtually every smartphone in the world uses an ARM processor". So, safe to say he's not worried in the slightest then.

     
  15.  
    07:35: ASOS PROFITS DOWN
    ASOS webpage screengrab

    Online retailer ASOS has reported as 14% slump in profits to £46.9m. Last year ASOS reported profits of £54.7m. There are no surprises here, though. The firm has previously warned "disruption" from investment in warehousing and the launch of its new business in China would hurt profits and that remains the case. Boss Nick Robertson says the firm is "in a period of major investment that comes at a short term cost, but the medium-term benefits will be significant."

     
  16.  
    07:20: ARM CHIPS
    chip

    ARM, which could well make the chips in your mobile phone, says it made $320m (£195.5m) of sales in the third quarter, up 12% compared with last year. It will probably sell $350m in the final three months of the year, it said.

     
  17.  
    07:10: RECKITT RESULTS
    Reckitt Benckiser products

    Reckitt Benckiser says it now expects full year revenue growth at the lower end of its total revenue growth target of 4-5%. The firm "delivered a robust performance in tougher markets in the third quarter" it said.

     
  18.  
    07:00: CHINA GROWTH BBC Radio 4

    China's economy grew by 7.3% in the three months to September, compared with expectations of 7.2%. But it's still the lowest growth in six years. The BBC's Chief Business Correspondent Linda Yueh tells the Today programme Chinese monetary policymakers want to slow the Chinese economic growth gradually and allow the rest of the world to get used to it. China is becoming a "middle income economy" she says and will revert to a normal path for a developed economy over time of around 3% to 4%.

     
  19.  
    Via Twitter Linda Yueh Chief business correspondent

    tweets: My interview with CEO of Oscar de la Renta fashion house, Alex Bolen, from Talking Business

     
  20.  
    06:41: ENGINEERING SKILLS Radio 5 live

    We don't have enough engineers in the UK or scientists for that matter argues Ann Watson of Semta, an engineering skills charity, on 5 live. She says: "We need a million scientists, engineers and technicians by 2020, We are starting to see a shortage in education; people training those recruits." The perception of engineering as a "dirty, oily industry" doesn't help, she says.

     
  21.  
    06:30: STOCK MARKET Radio 5 live

    Jane Foley, senior currency strategist at Rabobank is on 5 live talking about the falling stock market. "If we see stocks fall more we may see companies bargain hunting," she says. So more firms may start purchasing each other.

     
  22.  
    06:21: HEATHROW TRAVEL Radio 5 live
    heathrow

    Travel writer Simon Calder is on 5 live talking about the weather. He says he sees about 50 weather-related cancellations at Heathrow, so perhaps about 5% of flights so far. Flights to Frankfurt look hard to come by, he says.

     
  23.  
    06:12: FLIGHTS CANCELLED

    Heathrow airport has said this morning that around 10% of flights will be cancelled today as the remnants of Hurricane Gonzalo hit the UK. Flights with the 20 biggest carriers would be affected, it says. British Airways has already cancelled some ahead of the expected severe weather. The remains of the hurricane are predicted to bring heavy rain and gusts of up to 75mph in some areas, causing disruption to rush-hour travel. If you're travelling today it's worth checking before you arrive at the airport.

     
  24.  
    06:02: TOTAL CEO DEATH Radio 5 live

    Christophe de Margerie, the chief executive of French oil company Total, has died in an air crash in Moscow. Sarah Rainsford, the BBC's correspondent in Moscow says poor weather with low visibility is a possible cause of the crash. His plane crashed when it collided with a snow-clearing machine killing him and three crew, she tells 5 live.

     
  25.  
    06:01: Howard Mustoe Business reporter

    Good morning! Get in touch via email bizlivepage@bbc.co.uk or on twitter @BBCBusiness.

     
  26.  
    06:00: Matthew West Business reporter

    Morning folks, we have the latest public borrowing figures out at 9:30 today. But before that we have full year results from online retailer ASOS, and interim figures from Whitbread, plus the weather is promising to play havoc with the transport network today with 10% of flights out of Heathrow already cancelled this morning. We'll bring you everything as it happens.

     

Features

From BBC Capital

Programmes

  • Smart glassesClick Watch

    Smart spectacles go into battle – the prototypes looking to take on Google Glass

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.