Ford Motor Co. on Friday said first-quarter profit fell less than analysts had estimated as overseas losses ate into growing income from North America.
The US based automaker reported net income of $1.4 billion, 45 percent less than the $2.55 billion it earned in the same period of 2011. Revenue declined 2 percent, to $32.4 billion.
Ford said nearly half the decrease was due to paying a higher tax rate. At the end of last year, the company moved tax credits and other assets back onto its books, after moving them off in 2006 when it wasn’t making a profit. Ford is now paying a 32.5-percent tax rate, compared with 8 percent a year ago.
As China growth has slowed and European auto sales are at their lowest levels since the mid-1990s, the company has said it is relying on North America to boost earnings this year.
“Europe is a problem for everybody; there’s just too much overcapacity there and in Asia, Ford just doesn’t have much of a presence,” said Mirko Mikelic, a senior money manager at Fifth Third Asset Management in Grand Rapids, Michigan, which recently purchased five-year Ford notes.
“Expectations are high for Ford to continue to grow.”
However, the company confirmed that it would offer its 90,000 salaried retirees and former employees who are eligible to receive a pension the option to get a lump-sum payment instead of monthly distributions.
Ford had global pension liabilities of about $74 billion at the end of 2011, and the company’s pension plan was underfunded by $15.4 billion.