Wayne Gerdes - CleanMPG - July 28, 2014
Ford earned a 2Q pre-tax profit of $2.6 billion, an increase of 1.7 percent compared to the 2Q of 2013. This was the company’s 20th consecutive profitable quarter and its best since the 2Q of 2011.
Ford's 2Q net came in at $1.311 billion, an increase of 6.3 percent from the $1.233 billion earned in the 2Q of 2013. This result included a pre-tax special item charge of $481 million mainly due to automotive investment losses in Russia.
Revenue of $37.4 billion declined 1.3 percent from the $37.9 billion it booked in the 2Q of 2013.
Regarding vehicle volume, 2Q global sales of 1.661 million vehicles, down 1.0 percent from the 1.678 million vehicles sold in the 2Q of 2013.
As usual, it was sales of the F-Series pickup that made up the majority of global earnings. While North American revenue fell 2.8 percent to $21.2 billion, pretax profit accounted for $2.44 billion of the company’s $2.599 billion pretax profit.
2Q U.S. market share was 15.3 percent, down 1.2 percentage points from a year ago. Despite the sales falloff, North American pre-tax operating margin of 11.6 percent not only buries its domestic rivals, it actually increased a percentage point year-over-year based mainly on productivity gains.
In Europe, Ford reported its first quarterly profit in 3 years. Albeit miniscule, the company recorded a $14 million profit for the quarter vs. a $366 million loss in the 2Q of 2013. Ford stated it will again lose money for the year with actual profitability possibly returning in 2015.
In China, Ford saw wholesale volume increase 26 percent from the 2Q of 2013. 2Q market share in the Asia Pacific region was 3.7 percent, up 0.4 percent over the 2Q of 2013.
In South America, Ford experienced a loss of $295 million vs. a profit of $151 million in the 2Q of 2013. The company stated the weakness was due to wholesale volume and revenue decreasing by 22 percent and 30 percent, respectively vs. the 2Q of 2013.
Ford affirmed its guidance of a pretax profit of $7 billion to $8 billion for 2014 despite heavy marketing spending for the upcoming aluminum bodied F150s. 2015 should prove even more profitable as new products begin to reach dealership showrooms.
GM
One word, recalls.
GMs 2Q 2014 earnings before interest and tax (EBIT) was $1.4 billion. It earned a 2Q net of $190 million compared to $1.2 billion in the 2Q of 2013. While profitable, the recalls including a $400 million charge to cover payments made through the compensation fund and $1.2 billion in repair expenses for recalls in the second quarter alone. For the first and second quarters combined, recall repair expenses have reached a staggering $2.5 billion USD with an additional $874 million charged for potential recall costs over the next 10 years.
Total 2Q revenues of $39.6 were up 1.3% from the $39.1 billion booked in the 2Q of 2014.
The company’s global vehicle sales reached 1.503 million vehicles in the 2Q of 2014, down 7.8 percent vs. 1.631 million sold globally over the same period a year ago.
YTD, sales have fallen 6.7 percent to 2.971vehicles compared to 3,185 sold over the same period of 2013.
GM posted a 9.2% profit margin in North American excluding the onerous recall costs.
In the 2Q of 2014, GM’s U.S. market share was flat at 17.9% compared to the year ago period. Regarding retail vs. fleet, 27.6 percent of GM sales went to fleets vs. 27.0 percent a year ago.
In Europe, GMs 2Q losses reached $305 million, some 267 percent more than the $114 it lost in the 2Q of 2013.
A similar downturn occurred in South America with the company experiencing an $81 loss on the Continent compared to a $54 profit in the 2Q of 2013.
In the 2Q GM’s international operations including and mostly attributable to China was up 35.7 percent to $315 million vs. the $232 million earned in the 2Q of 2013.
Nissan
Nissan released their financial results for the three months ending June 30, 2014.
Its operating profit rose to $1.20 billion USD for its 1Q of 2014 - Nissan’s fiscal year begins in Aprilup 13.4 percent over the 1Q of 2013.
1Q net income of $1.10 billion was up 36.7 percent from the 1Q of 2013.
The improvement are accounted for by increased sales in both the U.S. and China, up 14.1% and 21.1% respectively.
During the first quarter of FY14 Nissan sold 1,240,000 vehicles globally, up 6.0 percent form the same period in 2013.
Nissan reaffirmed its global sales forecast for fiscal 2014 in which it expects to sell 5.65 million vehicles this fiscal year, up 8.9 percent.
2Q Ford and GM and 1Q 2014 Nissan Earnings Reports
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