DETROIT (AP) — Ford Motor Co.’s net income fell 24% in the first quarter from a year earlier as the company’s internal combustion engine vehicle division reported declines in revenue and sales.
The Dearborn, Michigan-based automaker said Wednesday that it earned $1.33 billion from January to March, compared with $1.76 billion a year earlier.
Excluding one-time items, Ford earned 49 cents per share, according to FactSet, enough to beat analysts’ estimates of 43 cents.
Quarterly revenue rose 3.2% to $42.78 billion, but fell short of Wall Street estimates of $42.93 billion.
Ford Blue, its internal combustion engine division, earned $905 million before taxes, down $1.7 billion from the previous year. Sales fell 13%. The company attributed the declines to lower inventory levels and F-150 pickup truck selection due to factory upgrades for a new model.
Chief Financial Officer John Lawler told reporters Wednesday that Ford will regain sales volume and selection later in the year, positioning the company for strong gains.
Ford Pro, its commercial vehicle division, offset some of the decline, posting pretax profits of just over $3 billion, more than double the same period last year. Pro sales increased 36%.
“We are very profitable now, but we believe this business will be profitable and durable for many years to come,” CEO Jim Farley said of the commercial unit.
But Model e, the electric vehicle business, lost $1.3 billion, nearly $600 million more than in the first quarter of last year. The company said it was cutting costs, but these were offset by falls in electric vehicle prices across the industry.
Farley said the electric vehicle business is currently the “biggest drag” on Ford’s performance. But he promised further cost cuts and gains in the next generation of electric vehicles coming to market in the next two to three years. A small team at the company is working on the foundations for smaller, cheaper electric vehicles, the company said.
“We will build a sustainably profitable EV business,” Farley said. “And it must cover the capital costs from its own resources and not be subsidized.”
The company maintained its full-year pretax profit forecast at $10 billion to $12 billion, but Lawler predicted it would be at the high end of the range.
The full-year capital spending estimate was cut to $8 billion to $9.5 billion from the previous forecast of $8 billion to $9.5 billion. The company said the reduced expenses reflect its commitment to efficient use of capital.
Lawler said Ford expects U.S. auto prices to fall 2% to 3% this year, but said that decline did not occur in the first quarter. Prices have remained stable across the industry, he said.
Still, Ford expects the price drop to occur later in the year.
“So far, consumption has remained relatively strong, industry has remained strong,” he said.
After the closing bell on Wednesday, Ford shares rose 3% in trading.