The renowned Motor Company Ford has experienced a massive drop in profits by 34%. This is majorly linked with the launch of F-150 pickup truck which is said to have cost quite a lot money. The pickup aimed is targeted to be a key profit maker once its popularity is stabilized. As such, the Ford Motor company is still confident in closing the all year profit with a positive deviation. Other factors have also been associated with the sudden drop in profits including low sales of wholesale vehicles, lower costs in addition to recent shortage of supplier parts.
Plans to shut down the F-150 Truck plant in Dearborn Michigan is said to have largely contributed to the 3% profit drop realized in the third quarter. Chief Financial officer of the company Bob Shank however says that the problems experienced across the North American Ford plants had been identified and addressed appropriately. As such, he sees that there is no cause for alarm as the company is set to pick up from the slight fall back. The fourth is therefore vital for this company which is set to make a comeback and recover the losses earlier experienced in the third quarter of the year.
The company is said to have reported, an average earnings of 24cents per share in comparison with the expected 19 cents as predicted by analysts. Despite this striking performance in North America, most analysts and investors are not happy and have not received the news positively.Ford’s profit margin of 7.1% saw them fall to their rivals General Motors Co which is reported to have registered 9.5% of the same. The loss is also evident in most parts of Europe and South America. Nevertheless, the company went ahead with its gains in China reaching a 4.7% market share; the highest so far!