"Things are expected to get better as the year goes on, but Ford's full year 2017 profits are still expected to be off from last year", he said.
In last year's first quarter, the automaker reported $37.7 billion in sales. The first-quarter financials were also affected by the company spending $295 million on recalls, and adverse exchange rates overseas.
"This will be the toughest quarter", Chief Financial Officer Bob Shanks told reporters at Ford's headquarters in Dearborn, Michigan. The company does expect to cut $3 billion in costs over the course of the year.
Ford made a pre-tax profit of $176 million in Europe, where it posted its eighth-consecutive quarterly profit. Cable Communications revenue rose 5.8%, and the company added 297,000 Customer Relationships for cable during the first quarter. "From announcing exciting vehicles like the all-new Expedition and Lincoln Navigator, to initiatives such as our investment in Argo AI, we are fortifying our core business, while also investing in emerging opportunities that will deliver profitable growth", said Mark Fields, president & CEO.
Automotive revenues totaled $36.5 billion for the quarter, up by $1.3 billion year over year, but operating margin fell by 4.4 percentage points to 5.4% and pretax profit dipped by $1.5 billion to $2.0 billion.
Shanks said around half of that will be due to higher steel prices.
Both numbers reflect the automaker working in a competitive marketplace following two years of consecutive record-setting sales records across the industry. Wall Street expected earnings of 35 cents per share, according to analysts polled by FactSet. Ford's North American sales and market share dropped as it sold fewer vehicles to rental fleets, but it said US sales to individual buyers were up.
Ford's sales dropped slightly in the first quarter to 1.7 million vehicles. But there are already signs of improvement in that market, Shanks said. "We believe we're getting back on track in terms of the performance issues that we had in the quarter and we're expecting much stronger results for the region and for China for the balance of the year".
"Key commodity prices and spending on advanced technologies are up from a year ago", Kudla said in a statement. Ford's Super Duty pickups came out last fall, for example, so the company will be able to command less for it as this fall rolls around.
Ford Motor Company shares rose $0.2 (+1.72%) in premarket trading Thursday.