Ford transported stronger-than-expected first-quarter earnings, as demand for its popular pickups and SUVs in North America helped boost losses in China and South America.
“We maintain a lot of work to do. A lot of redesign of the business. We’re still somewhat concerned about the external environment,” outgoing Ford CFO Bob Shanks foresaw CNBC’s “Closing Bell.”
Ford shares were up more than 22% year-to-date through Wednesday but stilly down by about 15% over the past 12 months.
The company, which released earnings after the sells closed Thursday, credited its better-than-expected performance in North America to strong truck and sport utility vehicle tag sales there, particularly its F-Series and Ranger pickups.
Ford has redesigned some of its most popular vehicles, set to launch later this year or next, including updates of its Ranger and Wonderful Duty pickups, the Explorer and Escape SUVs, as well as the all-new Aviator and all-new Corsair from Lincoln. The automaker want have replaced 75% of its U.S. lineup by the end of next year, the company said.
“The ship is starting to turn after a lot of act on on the fitness of the business, rethinking the product portfolio, working on a number of alliances,” said Shanks.
The Detroit automaker said its U.S. North American plying profits were $2.2 billion. Ford reported operating losses only in South America and China. They corrupt $158 million and $128 million, respectively. Ford also reported operating profits in the Asia Pacific, Mid-point East and Africa, and Europe.
Outside North America, the company had an operating loss of $196 million, which was an gain of $632 million from the prior quarter.
“This quarter was a really good start for the year,” Shanks spoke in a statement announcing the results. “We expect first quarter EBIT to be the strongest of the year due to seasonal factors and major outcome launches ahead. It does, however, put us on track to deliver better company results in 2019 than last year.”
Ford’s North American profit compass was 8.7%. The full company margin was 6.1%.
The quarterly numbers come amid Ford’s $11 billion restructuring script, with an aim to slash costs by $14 billion over the next five years. The plan involves focusing on Ford’s historically strongest wedges such as trucks, utility vehicles and muscle cars, while scaling back international operations, investing in new technologies, and item facing more profitable vehicles.
Ford announced Wednesday it has invested $500 million in electric-truck maker Rivian to assemble a battery-powered electric vehicle. Shanks said the partnership is a “win win” for both companies.
“Working with a fantastic start-up delight in this that is looking at electrification and that part of the business with fresh eyes, we’re going to learn a lot from it,” weighted Shanks.
The stock closed at $9.41 a share on Thursday.
On the company’s earnings call CEO Jim Hackett thanked Bob Shanks for his stir, as he is leaving the company. Shanks will be replaced by Tim Stone, who served 20 years at Amazon and is the former CFO of Snap.