Ford Earnings Beats Estimates Despite Economic Slowdown

The auto industry seems to be on a rebound across globe with most of the auto companies registering a profit in the first quarter of 2012.  However the road seems a bit bumpy for the American Auto major Ford who has experienced a sort of resurrection along with the rest of the auto industry, has registered a decline in profits in the first quarter of 2012 as the demand has gone down in Asia and Europe. The benefits, company has earned from the North American region are strong enough to overcome the declines. Moreover the profit and revenue figures registered by the company are also ahead of the analyst estimates.

Ford has lost money in Europe where the company sales gone down by 60,000 vehicles and Asia where the sales fell by 25,000 units as the consumption in China for the new cars slowed. On the other hand the company recorded its highest net profit since 2000 in North America region and the pretax profit also rose 17% to 2.1 billion. Ford’s performance in North America was lifted by its fuel-efficient vehicle portfolio and profitable trucks. Ford cars like Focus and Fiesta are also a big hit as they are low fuel consuming vehicles and preferred by the drivers. Ford Motor Co. revenue have registered a decline in the first quarter of 2012 , the profits have toppled to $ 1.4 billion from $2.6 billion last year. The reason for this decrease in revenue is cited with the higher tax rate, along with  the economic slowdown Europe and China are suffering from.  

Ford shares fell down 1.5% immediately after the earnings figure were released and now lay at a figure of $11.70 at mid-day . The industrial analysts expected Ford to report 35 cents per share on $ 31.27 billion in revenue whereas the company has reported 39 cents earnings per share on pre-tax operating profits of $2.3 billion. The Pre-Tax operating profits fell 19 percent only where the industry was expecting a 26 percent decline. Ford is planning to pay out lump-sum money to the current salaried U.S. retirees and former employees as it will reduce the pension obligations and balance sheet volatility.

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