posted near-record profit in North America but showed declines in every other area of the world.
Excluding items, Ford posted pretax operating profit of $1.8 billion, or 30 cents a share. Analysts surveyed by Thomson Reuters had estimated 28 cents. Net income was $1.04 billion, down 57% from a year earlier. Revenue fell 6% to $33.3 billion; analysts had estimated $32.2 billion.
Pretax operating profit declined to $1.8 billion from $2.8 billion in the same quarter a year earlier.
Ford's most troubled area was in Europe. Ford Europe revenue declined to $7.1 billion from $9 billion, and the company posted a pretax operating loss of $404 billion, compared with a $176 million gain a year earlier. Operating margin was negative 5.8%.
Europe's problems reflected lower volume, lower share and lower pricing, Ford said, adding that its full-year loss in Europe will exceed $1 billion and that it "views the challenges the industry faces as more structural than cyclical in nature."
"We have faced challenging situations in other parts of the business before, and successfully addressed them through our One Ford plan," said Chief Financial Officer Bob Shanks, in a prepared statement Wednesday. "We are reviewing all areas of our business to address the near-term challenges."
Ford South America had revenue of $2.3 billion, down from $2.9 billion a year earlier, and pretax profit of $5 million, down from $267 million. Operating margin declined to 0.2% from 9.1%. The company cited lower volume, higher costs, and unfavorable exchange rates in the region, which is expected to produce a substantially smaller profit than in 2011.
Ford Asia Pacific Africa revenue rose to $2.3 billion from $2.1 billion, but recorded a pretax loss of $66 million, compared with a gain of $1 million a year earlier, as strong market growth was offset by higher costs. Ford expects improved results in the second half.
In North America, revenue rose to $19.7 billion from $19.5 billion and the pretax gain rose to $2 billion from $1.9 billion. Operating margin exceeded 10%, reflecting higher net pricing and other factors, partially offset by higher structural costs and unfavorable volume and mix. For the full year, Ford said it expects higher pretax operating profit and margin compared with 2011, reflecting new products.
Automotive gross cash exceeded debt by $9.5 billion at the end of the second quarter, a net cash increase of $200 million during the quarter.
Ford shares were rising 13 cents to $9.14 in premarket trading Wednesday.
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