Ford Motor Company reported third quarter 2014 financial results in October, posting a net income of $835 million, or 21 cents per share, on revenue of $34.9 billion. Even though the results represent Ford’s 21st consecutive profitable quarter, they’re down on a year-over-year basis.
Compared to the third quarter of 2013, FoMoCo’s net income dropped $437 million, or 10 cents per share, while revenue dropped $900 million. In fact, most of the automaker’s financial metrics declined on some level. Partly responsible for the drop is Ford’s Asia Pacific division, in which Ford is continuing to invest through both new and expanded plants, new products and the introduction of Lincoln in China.
Here’s how Ford Asia Pacific fared in Q314.
Sales Volume, Revenue
Ford Asia Pacific wholesale volume was 346,000 units and net revenue (which excludes the company’s China joint ventures) was $2.6 billion, up 5 percent and 3 percent, respectively.
The higher volume, according to Ford, is more than explained by higher market share and industry volume.
Ford estimates third quarter Seasonally Adjusted Annual Rate (SAAR) for the region at 38.9 million units, up 1.8 million units from a year ago. explained primarily by China. Higher revenue is more than explained by favorable mix.
Ford Asia Pacific reported a pre-tax profit of $44 million for the third quarter of 2014, a decrease of $72 million from a year ago, a $72 million decrease from the $116 million in the third quarter of 2013.
Operating margin was 1.7 percent, 2.9 percentage points lower than a year ago.
According to Ford, the decrease is more than explained by higher structural costs and unfavorable exchange, partially offset by favorable market factors. The higher structural costs reflect Ford’s continued investment in products and growth, including five new plants that will come on line over the next nine months, as well as the launch of the Lincoln brand.
Ford’s market share was 3.6 percent in the third quarter of 2014 — a record for the third quarter, and 0.2 percentage points higher than a year ago.
The improvement was driven by the Chinese market, where Ford’s market share improved 0.4 percentage points to a record 4.7 percent, reflecting continued strong sales across the company’s vehicle lineup.
Ford’s full-year guidance for Asia Pacific remains as before, with a pre-tax profit of about $700 million, which is higher than a year ago.