Ford Motor Co reported a lower quarterly net profit on Thursday but beat analyst expectations amid higher commodity, engineering and recall costs, and a drop in vehicle sales
Ford shares were down slightly at $11.54 in early trade.
The No. 2 US automaker, which reiterated its pretax profit forecast for 2017, warned investors in late March that higher costs and lower sales volumes would hurt quarterly earnings.
Chief Financial Officer Bob Shanks told reporters at the company’s headquarters in Dearborn, Michigan, that additional costs made this the “toughest quarter” for 2017.
Shanks said Ford’s results for the rest of the year would be “about flat to a little bit better” compared with 2016.
The company’s results come at a time of uncertainty for the U.S. auto industry following disappointing sales in March.
While sales of new vehicles have risen since the end of the Great Recession and hit 17.55 million units in 2016, analysts expect a slight sales decline in 2017. Ford said Thursday it expects industrywide sales to decrease a little this year and in 2018.
Ratings agencies have warned of worsening credit and there are concerns millions of nearly new leased vehicles due to flood the market over the next couple of years will depress used-car values and hurt US automakers’ sales.