General Motors isn't the only Detroit automaker posting falling profits in the first quarter. Ford just released its Q1 2014 financial data, and it reported a net income of $989 million, down $622 million from Q1 2013. The drop is partially blamed on higher warranty and recall expenses than the company had anticipated.

Financially, Ford suffered a rough quarter almost across the board. Its pre-tax profit of $1.4 billion was also down $765 million from a year ago. Things were even worse in the North American market where operating profit fell significantly to $1.5 billion, down from $2.392 billion in Q1 2013. However, its global revenue ticked up slightly to $35.9 billion, from $35.6 billion in this period in 2013.

Ford admitted that it spent about $900 million on expenses that it hadn't planned for during this quarter. According to Reuters, the company paid about $400 million in additional warranty and recall costs in North America. The automaker didn't explain why the costs were so much higher than expected. However, in the last three months, Ford has had several recalls, including on the 2001-2004 Escape for rust, Explorer for its steering, Edge for its fuel line and others.

There is some good news in the report, though. The Blue Oval's Asia Pacific division had record profit of $291 million, compared to a loss of $28 million last year. This was partially due to record market share of 4.5 percent in China. By the end of the year, Ford forecasts having $7 billion to $8 billion in profit, and it's launching 23 new vehicles worldwide this year. The entire report can be downloaded as a PDF, here.


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    • 1 Second Ago
  • 10 Comments
      Whatamooseiam
      • 8 Months Ago
      Go over to nhtsa.gov and it will show you just how many numerous recalls, service bulletins and complaints to Ford there is in the past year alone. At a time when virtually all automakers are now generally reliable, Ford just can't keep up with the competition.
      Keoki
      • 8 Months Ago
      Keep sending Ford your hard earn money for mediocre products.
      Dean Hammond
      • 8 Months Ago
      funny how two different reports on the same subject are worded differently....North America reported a pre-tax profit of $1.5 billion in the first quarter, a decline of $892 million from last year’s record profit. The results are more than explained by unfavorable market factors and higher costs. The higher costs are more than explained by $500 million related to warranty reserve increases for field service actions and weather-related costs, as previously noted. Wholesale volume and revenue declined 2 percent and 5 percent, respectively, for the first quarter. The volume decrease is primarily explained by lower market share, partially offset by higher industry sales, including a U.S. SAAR of 16 million units that was 400,000 units higher than a year ago, and favorable changes in dealer stocks. The decline in revenue mainly reflects lower wholesale volume, unfavorable mix, lower net pricing and the adverse effect of a weaker Canadian dollar. First quarter U.S. market share was 15.3 percent, down 0.6 of a percentage point from a year ago. The decline reflects planned reductions in daily rental sales and lower small car retail share. Total F-Series share was unchanged from a year ago.
        RevenantDC5
        • 8 Months Ago
        @Dean Hammond
        I wonder if whoever downvoted this actually understood what they read. It's a favorable thing, and just quoted statistics. How do you downvote that?
      BillyM67
      • 8 Months Ago
      I've had my 18 month old Explorer in 3 times for warranty work, so I don't think this is hard to believe.
      george
      • 8 Months Ago
      And weak sales in NA due to hard winter does not play into this?
      cpmanx
      • 8 Months Ago
      If you want real news about Ford's quarterly profit, this is a far more informative story: http://www.detroitnews.com/article/20140425/AUTO0102/304250056/0/auto01/Ford-profit-falls-costs-up-North-America Let's see. Results were bad across the board? No, they improved in Europe and Asia. Excluding a one-time currency charge, results improved in Latin America, too. North America accounted for essentially the entire profit drop. Ford spent an extra $400 million on warranty costs? No, Ford put an additional $400 million into its reserve fund for future recalls and warranty costs. That's an important distinction.
      cpmanx
      • 8 Months Ago
      If you want real news about Ford's quarterly profit, this is a far more informative story: http://www.detroitnews.com/article/20140425/AUTO0102/304250056/0/auto01/Ford-profit-falls-costs-up-North-America Let's see. Results were bad across the board? No, they improved in Europe and Asia. Excluding a one-time currency charge, results improved in Latin America, too. North America accounted for essentially the entire profit drop. Ford spent an extra $400 million on warranty costs? No, Ford put an additional $400 million into its reserve fund for future recalls and warranty costs. That's an important distinction.