Ford Reports Earnings Jump in 2017, Says This Year Will Be Harder
Industry observer says car manufacturer’s fourth-quarter sales came with higher incentive costs.
Ford reported full-year earnings surged 65 percent to $7.6 billion in 2017, but said this year would be more difficult.
The nation's second-largest automaker said its pre-tax profit was slammed by commodity costs, with the price of steel and aluminum rising.
Revenue edged higher to $145.7 billion, with global sales stagnating at 6.6 million vehicles.
The auto manufacturer on Wednesday also reported a net profit for the fourth quarter compared to a loss for the same period in 2016.
Ford tallied net income of $2.41 billion in the final three months of 2017 versus a loss of $781 million in the year-earlier period.
Last week, Ford warned its earnings would probably head south in 2017 as U.S. sales slip.
“We are intensely focused on improving the operational fitness of our business to deliver strong results while continuing to build toward our vision of the future,” Ford CEO Jim Hackett said Wednesday in a statement.
One industry observer noted that while Ford enjoyed a nice sales boost in the fourth quarter, it came with a price, with incentives offered by Ford up 20.4 percent to an average of $4,445, higher than the industry average of $3,400.
"With incentives already at high levels and the truck wars heating up, Ford is setting itself up for an expensive 2018," said Jessica Caldwell, director industry analysis at Edmunds.