Economy

Ford's Profit Jumps 63% on Strong Truck Sales

At the start of this month, Hackett said Ford planned to cut material costs by $10 billion and engineering expenses by $4 billion over five years, shift $7 billion of capital costs from cars to SUVs and trucks, embrace partnerships such as its recently announced alliance with India's Mahindra Group, and deliver 13 new electric vehicle models in the next five years. The earnings of 39 cents per share handily beat Wall Street's expectations. Fiat Chrysler's shares also jumped Tuesday after it reported a 50 percent increase in its third quarter net income, to $1 billion.

Earnings per share grew to $0.39 from $0.24 previous year.

US sales of F-Series pickups were up 14 percent during the quarter.

The consensus analysts' estimate for fourth-quarter 2017 EPS is $0.48 on revenues of $36.17 billion. Operations outside North America was about breakeven in total.

In premarket trading, Ford shares were up 18 cents at $12.22.

While better margins and cost cutting have made a difference in Ford's results, the company's lower tax rate has more than pulled its weight. They have less than 1% this year. Automotive revenue of $33.6 billion also topped analysts' forecasts.

Wholesales were 1.50 million units, down 26 thousand from a year ago. In the US, average transaction prices rose more than twice the industry average in the quarter.

"With improved operating performance, and traction against cost initiatives, tightening adj. EPS guidance range to $1.75 to $1.85", Ford said.

The company previously expected full-year adjusted earnings of $1.65 to $1.85 per share. That compares to $1.76 per share in 2016.

The company, however, posted a surprise loss in Europe related to continued fallout from Brexit in the United Kingdom market, and slimmer margins in China due to pricing pressure. South America continues to expect loss to improve from last year, while Europe is expected to remain profitable, although below prior year.



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