In October, Ford Motor Credit Company, Ford’s captive finance arm, reported third quarter 2014 earnings. The division earned a pre-tax profit of $498 million, up $71 million, or 14 percent, compared to the $427 million it earned during the same time period a year earlier. Net income was $718 million, up $446 million, or 62 percent, over the $272 million it earned in the same time period a year earlier.
Ford Motor Credit - Earnings - Q3 2014
|METRIC||Q314||Q313||Q314 - Q313||Q314/Q313|
|PRE-TAX PROFIT||498 MILLION||427 MILLION||+71 MILLION||+14%|
|NET INCOME||718 MILLION||272 MILLION||+446 MILLION||+62%|
Ford says that the higher pre-tax profit is more than explained “by higher volume, reflecting increases in nearly all financing products, including non-consumer and consumer finance receivables globally, as well as leasing in North America.” Meanwhile, the increase in net income was primarily driven by favorable tax items recorded during the quarter.
“We continue to provide solid profits and strong support for Ford Motor Company’s growth plans,” Chairman and CEO Bernard Silverstone said. “The foundation of our profitability and growth is the consistency and quality in our business fundamentals, including risk standards, portfolio performance and delivery of world-class customer and dealer service.”
Ford Motor Credit - Receivables Summary - Q3 2014
|METRIC||SEPTEMBER 30, 2014||YEAR-END 2013|
|NET RECEIVABLES||$106 BILLION||$100 BILLION|
|MANAGED RECEIVABLES||$110 BILLION||$103 BILLION|
On September 30th, 2014, Ford Credit’s total net receivables were $106 billion, compared with $100 billion at year-end 2013.
Managed receivables were $110 billion on September 30th, 2014, up from $103 billion on December 31st, 2013.
On September 30th, 2014, managed leverage was 8.5:1, equal to year-end 2013.
Ford Credit continues to expect full-year pre-tax profit of $1.8 billion to $1.9 billion, while the division’s guidance for year-end managed receivables and managed leverage remains unchanged.
Ford Credit now expects distributions to its parent of about $400 million, up from prior guidance of about $250 million, primarily driven by the favorable tax items.
For 2015, Ford Credit expects full-year pre-tax profit about equal to or higher than 2014.