Dncil Mircea Gheorghe

CIG. Anul I. Grupa I.

Ford's profit falls 39% in first quarter

Ford Motor Co.'s worldwide sales rose in the first quarter, propelled by growing
strength in Asia and Europe. But weakness in North America dragged down the
automaker's profit.
Its earnings missed Wall Street's expectations, while revenue beat them. Ford
shares fell more than 3%, the most in three months.
Also Friday, Chief Executive Alan Mulally, said there was no change in the plan
for him to stay with the Dearborn, Mich., company at least through the end of this year.
Ford's first-quarter net income fell 39% to $989 million, or 24 cents a share, down
from $1.64 billion, or 41 cents, a year earlier.
Excluding a one-time charge of $122 million for plant closings in Europe, Ford
earned 25 cents a share. That was far short of Wall Street's expectations.
Revenue rose slightly to $35.9 billion, beating analysts' expectations of $34.2
billion. Worldwide sales were up 6% to nearly 1.6 million vehicles.
Ford's U.S. sales fell 3% to 580,260 in the January-through-March period, the
victim of bad weather and low buyer interest in smaller, fuel-efficient cars such as the
Focus and C-Max hybrid. While the F-Series pickup continued to see gains, sales of other
key vehicles such as the Fusion sedan and Escape SUV were down.
Ford's chief financial officer, Bob Shanks, said the company had forecast lower
sales in North America this year as it launches 16 new vehicles in the region.
But Ford made up for those losses elsewhere. In China, first-quarter sales soared
45% to 271,321 vehicles. And European sales, long a sore point for Ford as Europe went
through a recession, rose 11% to 326,000.
Ford's Asia Pacific operations continued to thrive under the company's ambitious
expansion plans, but Ford sputtered in North America and lost money in South America
and Europe. A newly created Middle East and Africa region was profitable.
The company also took a $400-million charge for warranty reserves and repair
costs. Shanks said Ford regularly forecasts what its future warranty and recall costs will


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be and sets aside money for them. The company said those costs have been rising, so it
decided to add $340 million to its reserves for vehicles from the 2008 through 2013
model years. Ford said the decision was not related to the spate of first-quarter recalls at
rival General Motors Co.
Ford enjoyed one of the best years in its history in 2013, with a pretax profit of
$8.56 billion. But it had warned that this year would be leaner as it launches a record 23
vehicles worldwide and seven plants, including four in China. The company said it still
expects a full-year pretax profit between $7 billion and $8 billion.
Ford shares slid 3.3% to $15.78 on Friday. The stock has climbed 2.3% this year
after rising 19% last year.

Source: http://www.latimes.com

Unknown words:
to propel = a propulsa, a stimula
to drag down = a trage n jos
earnings = ctig, salariu
revenue = venit, percepie
charge = tax, sarcin
plant = uzin
to forecast = a prezice, a prevedea
to soar = a urca, a crete
to thrive = a prospera, a reui
expansion = expansiune, extindere
to sputter = a se blbi
warranty reserves = rezerve de garanie
pretax profit = profit nainte de impozitare
leaner = mai flexibil, mai suplu
slid = a aluneca, a trece pe nesimite





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Summary:

Ford has reported a 39% drop in first-quarter profits as its performance in the
North American market weakened.
The carmaker earned $989m in the January to March period, down from $1.64bn a
year before.
Overall revenue for the first quarter rose slightly to $35.9bn, and it sold 1.6
million vehicles in the three months period, a rise of 6%.
Chief financial officer Bob Shanks said the boosting of such funds was normal
across the car industry, as vehicles became more complex.
Ford said it had increased its market share in China, and in the Asia Pacific region,
where operations continued to thrive under the company`s expansion plans.
Anyway, the company has failed in North America and recorded loses in Europe
and South America. The good news came from the newly created Middle East and Africa
region, which was profitable.
Ford set aside $400m to boost its reserve fund that deals with vehicle warranty
issues. The company also is launching a record 23 new vehicles globally in 2014 and
seven more plants, including four in China.