April 25 - Ford's profit fell as it set aside more money to fix older vehicles and bad weather boosted its freight costs. Fred Katayama reports.
Ford's profit fell 39 percent in the latest quarter because it set aside more money to fix older vehicles. The growing number of recalls and customer complaints pushed Ford to boost its warranty reserves. Also biting into the bottom line: higher shipping costs due to the nasty winter weather in the U.S. and costs stemming from the devaluation of Venezuela's currency. Echoing GM, Ford suffered in South America from those currency translations while shrinking its losses in Europe and recording record profit in Asia. Strong sales of the family car Mondeo and the Kuga sport utility drove Ford's market share higher in Europe and China. J.P. Morgan analyst Ryan Brinkman said Ford's results were "better than it looks." He says " ... investors will conclude that Ford's underlying operations are performing well despite this being a 'transition year' on a record number of new product launches, setting the company up for even better performance down the line." Ford is launching a record 23 new cars and trucks worldwide this year. Ford's shares, which have outgunned GM this year, sold off at the start of trade.