DETROIT (AP) — Ford Motor Co.’s first-quarter net income fell 24% from a year ago as the company’s combustion engine vehicle unit saw revenue and sales decline.
The Dearborn, Michigan, automaker said Wednesday it made $1.33 billion from January through March, compared with $1.76 billion a year earlier.
Excluding one-time items, Ford made 49 cents per share, enough to beat analyst estimates of 43 cents, according to FactSet.
Revenue for the quarter was up 3.2% to $42.78 billion, but that fell short of Wall Street estimates of $42.93 billion.
Ford Blue, the combustion engine unit, made $905 million before taxes, down $1.7 billion from a year ago. Revenue was down 13%. The company blamed the declines on lower inventories and selection of F-150 pickups due to updating factories for a new model.
Chief Financial Officer John Lawler told reporters Wednesday that Ford will recover sales volume and selection later in the year, positioning the company for strong earnings.
Ford Pro, the commercial vehicle unit, offset some of the decline, posting pretax earnings of just over $3 billion, more than double the same period last year. Pro revenue was up 36%.
“We’re very profitable now, but we believe that this business will be profitable and durable for many years to come,” CEO Jim Farley said of the commercial unit.
But Model e, the electric vehicle business, lost $1.3 billion, almost $600 million more than the first quarter of last year. The company said it’s cutting costs, but those have been erased by electric vehicle price declines across the industry.
Farley said the EV business is the “main drag” on Ford’s performance right now. But he pledged further cost cuts, and profits on the next generation of electric vehicles coming out in the next two to three years. A small team at the company is working on underpinnings for smaller more affordable EVs, the company said.
“We’re going to build a sustainably profitable EV business,” Farley said. “And it needs to return the cost of capital on its own and not be subsidized.”
The company held its full-year pretax earnings forecast at $10 billion to $12 billion, but Lawler predicted it would be toward the high end of the range.
It lowered an estimate of full-year capital spending to $8 billion to $9 billion, down from earlier guidance of $8 billion to $9.5 billion. The company said the reduced spending shows its commitment to using capital efficiently.
Lawler said Ford expects U.S. auto prices to fall 2% to 3% this year, but said that drop didn’t materialize in the first quarter. Prices, he said, held up across the industry.
Still, Ford expects the price drop to happen later in the year.
“So far, the consumer stayed relative strong, industry has remained strong,” he said.
Shares of Ford rose 3% in trading after Wednesday’s closing bell.