Looking ahead to 2017 and 2018, CEO Mark Fields sounded a note of caution during a conference call with investors, which he said was "realistic, not optimistic or pessimistic, but realistic". But the costs of their launch, including a revamp of this Kentucky factory, weighed on the Blue Oval's third-quarter results. In case Ford Motor sells off today, new investors could profit from a dividend yield in excess of five percent.
Tesla Motors Inc.(TSLA) could be an early gainer, after the electric-car maker delivered a surprise profit (http://blogs.marketwatch.com/thetell/2016/10/26/tesla-earnings-expected-to-show-loss-despite-elon-musks-plea-live-blog/) and better-than-expected revenue.
As expected, a major door-latch recall added about $600 million in costs.
Ford's F-150 was still new a year ago, and production and sales were skewed toward high-profit high-trim retail models. But as USA sales peak, Ford is feeling the effects.
Share prices can move sharply, up or down depending on earnings results and Ford Motor Co.
Despite posting a healthy pre-tax profit of $1.26 billion in North America, Ford's operating profit margin in the region fell to 8.4% from 12.3% a year earlier.
Ford's US light-vehicle sales fell 6.7 percent in the quarter to 632,123 from 677,163 a year earlier, according to researcher Autodata.
However, weakness in South America, frequent product recalls and rising structural expenses are concerns. This means that the pre-tax results are projected to decline from $10.8 billion in 2015. And that decline "is really what's driving the company change", Ford Chief Financial Officer Bob Shanks said.
"Over the next few years, Ford won't report disgusting numbers, but it's not attractive for investors", said David Whiston, an analyst for Morningstar Inc.in Chicago, said before the report was released. But Shanks said that the company thinks the Brazilian economy has bottomed out and is poised to rebound.
Tesla's positive free cash flow of $176m in the quarter is helped by the fact that the company's capital expenditures budget is heavily loaded to the fourth quarter.
Ford's Asia-Pacific region includes its sizable Chinese operation. Ford sales in China grew 11% this year through September to 791,309 vehicles. That should be offset in the next several months by increased sales of the more profitable Super Duty, which sells for an average price of about $62,000. Tesla spent $759m in the first nine months of the year and plans to spend more than $1 billion in the fourth quarter.
Europe eked out a $138 million profit, its best third quarter since 2007.
Ford's pre-tax operating margins were down by about half at 5.8% in North America and 3.3% worldwide. Ford said a strong performance In Europe was driven by cost reductions, favourable mix and balance sheet exchanges. The business had revenue of $35.90 billion for the quarter, compared to analyst estimates of $32.70 billion.
Ford stood by its full-year overall profit guidance as revised in September. It's also down from Ford's record-setting profit of $10.8 billion in 2015.
On a per-share basis, Ford earned 26 cents.