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Ford posts weaker-than-expected profit as warranty reserves rise
April 25, 2014 / 11:01 AM / 3 years ago

Ford posts weaker-than-expected profit as warranty reserves rise

DETROIT, April 25 (Reuters) - Ford Motor Co posted lower-than-expected first-quarter profit on Friday as the No. 2 U.S. automaker increased warranty reserves in North America for older vehicles by $400 million.

Net income fell 39 percent to $989 million, or 24 cents a share, from $1.61 billion, or 40 cents a share, in the year-earlier period.

The quarter included $400 million in additional costs for warranty reserves in North America for vehicles from as early as the 2001 model year, and $100 million in costs related to higher freight and other items due to the quarter’s harsh winter. It also included previously disclosed costs of $400 million, mostly due to the currency devaluation in Venezuela.

Excluding one-time items for European restructuring, Ford earned 25 cents a share, 6 cents below analysts’ estimates in a poll by Thomson Reuters I/B/E/S, or about the same amount as the warranty reserves. (Reporting by Ben Klayman and Bernie Woodall; Editing by Jeffrey Benkoe)

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