Ford Motor Company (NYSE:F) recorded a better-than-anticipated second quarter despite upheaval in its executive ranks and dismal sales. Net income surged 4% to $2 billion, due to a remarkable performance from its credit arm and change in the firm’s tax rate.
Adjusted profits of 56 cents a share came well above the Wall Street projections of 43 cents. One-time items comprised a $248 million charge as the firm moved manufacturing of the Ford Focus to China from Mexico. The automotive revenue came at $37 billion which met Wall Street’s anticipations. Total revenue jumped 1% to $39.85 billion.
The details
There were big deviations over the previous three months for Ford Motor. In May, the company abruptly reported resignation of CEO Mark Fields and appointment of Jim Hackett as its new CEO. Hackett had been leading company’s mobility segment. The ex CEO of office furniture firm Steelcase Inc. is in the middle of a 100-day assessment of operations at the firm. Bob Shanks, the CFO of Ford Motor, reported that they are all excited and energized about what they are finding.
Hackett, looking to support decisions at the century-old firm, has shuffled company’s management team. Shanks reported that the firm is adjusting its plans and anticipates to invest more in commercial vehicles, mobility, SUVs and other growth segments.
The elevated performance in Q2 2017 was due mainly due to lowering of the firm’s corporate tax rate, to 10% from 30%. Ford has put some global losses back on its books in expectation of changes in the corporate tax code in the United States. As per the update, Ford anticipates to witness a 15% rate this year, however that will return to 30% next year.
Full-year projection was revised upward following the tax change. Ford anticipates adjusted earnings to come in between $1.65 and $1.85 for FY2017, up from its initial projection of $1.58 a share. Last year Ford recorded $1.76 a share. Its automotive revenue is anticipated to be almost equal to its FY2016 revenue of around $141 billion.