Ford has suffered a difficult start to 2017, reporting a 35 per cent drop in profits during the first quarter.
Across January, February and March, Ford earned $1.6 billion in profit, significantly less than the $2.4 billion it earned in the record-setting first quarter of 2016.
The American automaker knew profits would suffer on the back of recalls and higher costs for warranties and materials. In fact, Ford told its investors that its first-quarter profit would fall to between 30 and 35 cents per share but ultimately, it landed at 39 cents per share, also exceeding expectations of Wall Street analysts.
Speaking about the results, Ford chief financial officer Bob Shanks said that sales in North America and two other regions were higher in the last four weeks than had been anticipated.
One of the biggest expenses for the Blue Oval in the first quarter was a $467 million increase in warranty costs on the back of $300 million being spent on two large recalls.
According to president and chief executive Mark Fields, “This quarter was an investment in Ford’s future. From announcing exciting vehicles like the all-new Expedition and Lincoln Navigator, to initiatives such as our investment in Argo AI, we are fortifying our core business, while also investing in emerging opportunities that will deliver profitable growth.”
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