What Helped Ford Improve Profitability in Q1 2019?



Ford’s Q1 2019 EBIT

For the first quarter, Ford (F), the second largest American automaker, reported automotive segment EBIT of $2.0 billion. This EBIT figure was about $277 million higher than the $1.7 billion EBIT in the first quarter of 2018. Similarly, the company’s automotive segment EBIT margin improved to 5.4% in the first quarter this year from 4.4% in the first quarter of the previous year.

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Key profitability drivers

Among its key geographical markets, the company reported negative EBIT from China as well as from South America. While the company’s EBIT from Europe and Asia-Pacific fell on a YoY basis, it remained in positive territory. On the brighter side, Ford reported $14 million in EBIT from the Middle East and Africa region, which was far better in the first quarter this year as compared to the $54 million EBIT loss in the first quarter of 2018.

Despite lower global sales volumes, a favorable product mix driven by higher demand for pickup trucks and utility vehicles helped Ford improve its profitability in the last quarter. Moreover, a notable improvement in the company’s North America operating performance had a positive impact on Ford’s total first-quarter profitability.

Ford’s direct peers (XLY) such as General Motors (GM) and Fiat Chrysler (FCAU) plan to announce their results for the quarter on April 30 and May 3, respectively. On April 24, American electric carmaker Tesla (TSLA) released dismal first-quarter results and missed Wall Street analysts’ estimates by a wide margin. Read All You Need to Know about Tesla’s Q1 Earnings Results to learn more.


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