With Ford Motor Company having reported its earnings for the second quarter of 2014, Ford Credit — The Blue Oval’s financial division — has reported its earnings for the same time period. The results are positive overall but down on a year-over-year basis.
Pre-tax profit came in at $434 million, down $20 million compared to the $454 million in pre-tax profit earned in the second quarter of the previous year. The organization points to a higher level of insurance losses from storm damage to dealer inventory as the reason for the lower pre-tax figure.
Net income was $264 million in the second quarter of 2014, down $11 million compared to the $275 million in pre-tax profit the previous year.
“We have grown our receivables, maintaining our principles of prudent lending and our record of consistent profitability,” Chairman and CEO Bernard Silverstone said. “Our focus on exceptional dealer and customer service and our integrated market approach with Ford Motor Company continue to benefit the enterprise.”
On June 30, 2014, Ford Credit’s total net receivables stood at $107 billion, compared with $100 billion at year-end 2013. Managed receivables were $111 billion on June 30, 2014, up from $103 billion on December 31, 2013. In addition, managed leverage on June 30, 2014 was 8.6:1, compared with 8.5:1 at year-end 2013.
Ford Credit now expects full-year pre-tax profit to be higher than in 2013, an improvement from about equal to or higher than 2013. the organization now expects year-end managed receivables of $112 billion to $115 billion, up from prior guidance of about $110 billion. It also continues to expect managed leverage in the range of 8:1 to 9:1, and distributions to its parent of about $250 million.