(Adds stock price, CEO comment)
By Bernie Woodall
DEARBORN, Mich., July 24 (Reuters) - Ford Motor Co reported second-quarter operating earnings that beat expectations thanks to record profit in North America, boosting its shares more than 1 percent in early trading.
Pretax profit in North America of $2.44 billion and the company’s first profit in Europe in three years offset weaker-than-expected results in Asia Pacific and South America.
Chief Financial Officer Bob Shanks said lower costs boosted the company’s performance in North America. Nine analysts surveyed by Reuters expected a pretax profit of $2.04 billion.
Costs in the second half of the year are expected to rise as the company introduces more products, including the most important vehicle in its portfolio, the F-150 pickup truck.
Ford’s new chief executive, Mark Fields, said during a conference call he was “confident” the F-150 would launch on time without the quality problems sometimes associated with new-vehicle launches.
A limited number of new F-150 trucks, which will be about 700 pounds lighter than the current version, will be available later this year.
The company’s operating margin in North America improved to 11.6 percent, from 10.6 percent a year ago.
Ford affirmed its full-year guidance for a pretax profit of between $7 billion and $8 billion. Last year, its pretax profit was $8.6 billion.
The company’s outlook for South America was downgraded to a greater loss than previously expected. It now anticipates breaking even or taking a loss in the second half of the year.
For the quarter, South America showed a loss of $295 million.
The Asia-Pacific region’s operating profit of $159 million was less than the $260 million expected by analysts. Shanks said most of that profit came from China, but didn’t give a breakdown.
Ford’s market share in China, the world’s biggest car market, rose to a record 4.6 percent.
Profit in Europe “clearly shows that the transformation plan is working,” said Shanks of restructuring efforts that included closing a Belgian plant.
Ford maintained its outlook for full-year profit in Europe in 2015.
One-time items in the quarter included an accounting charge of $329 million because of poor cash flow in Russia, where Ford has a joint venture with carmaker Sollers.
The quarter was Ford’s last one under the leadership of Alan Mulally, who retired as chief executive and was credited with Ford’s turnaround in his tenure that began in 2006.
Excluding one-time items, Ford earned a profit of $2.6 billion, or 40 cents per share, which topped the 36-cent-per-share forecast by analysts surveyed by Thomson Reuters I/B/E/S.
Net income in the quarter was $1.3 billion, or 32 cents per share, up from $1.23 billion, or 30 cents, a year earlier. Revenue of $37.4 billion compared with $37.9 billion a year ago.
Ford shares were up 1.5 percent at $18.06 in morning trading, after earlier jumping nearly 2 percent. (Editing by Bernadette Baum)