Wednesday, 29 July 2015

Ford, Nissan also show improved financial results

Declaring its second quarter results, Ford Motor Company shows a pre-tax profit of $2.9 billion, up $269 million from a year ago. Nissan too has impoved its results.
In North America, Ford Motor Company declared a pre-tax profit for the second quarter that was a record for any quarter at $2.6 billion, up $157 million from last year’s record profit. (Revenue = $23.3 billion; pre-tax profit = $2.6 billion).

Favorable volume, mix and net pricing were offset partially by higher costs and unfavourable exchange. Higher wholesales reflect the non-repeat of last year’s stock reduction and higher industry sales. Market share was a partial offset driven by lower availability of F-150.

Higher revenue was driven by higher volume, net pricing and favorable mix; effect of the strong U.S. dollar was a partial offset. North America’s pre-tax profit is expected to exceed last year’s result.

In South America, Ford continues to benefit from the strategy of replacing legacy products with One Ford products, even in a difficult business environment. (Revenue = $1.5 billion; loss = $185 million).

The new Ka drove strong share gains, which at 10 per cent, was up 1.1 percentage points. In Brazil, Fusion continues to lead its segment, and as a result of the success of the F-Series and Cargo, Ford led the light and semi-light truck segments. In Argentina, Ford continued to rank second in sales, and EcoSport and Mondeo led their segments.

Wholesale volume was down 14 per cent due to lower industry sales. This, along with weaker currencies, resulted in a 29 per cent decline in revenue. Pre-tax results improved from a year ago due to higher net pricing. For the full-year, pre-tax loss is expected to improve from 2014.

In Europe Ford continued its transformation plan focused on product, brand and cost. Wholesale volume improved 3 per cent compared with a year ago as a result of higher Europe 20 industry sales, as well as higher industry sales and Ford share in Turkey. These factors were offset partially by the non-repeat of last year’s dealer stock increase. (Revenue = $7 billion; loss = $ 14 million).

Revenue was down 14 per cent due to the adverse translation effects of the strong US dollar. Pre-tax results were largely unchanged from a year ago, however, the underlying operating performance in Europe improved.

Ford’s results did not benefit from the usual seasonal stock increase or last year’s one-time reserve release. Volume and mix were favorable, and net pricing improved. The pre-tax loss expected to improve for the full year from 2014.

In the Middle East and Africa, the company remains focused on building its distribution capability, expanding its product offering tailored to the needs of the region, and leveraging its global low-cost sourcing hubs. (Revenue = $0.9 billion; loss $46 million).

Wholesale volume and revenue declined 10 per cent and 23 per cent from a year ago, respectively. Lower volume was a result of unfavorable changes in dealer stocks due to production timing differences, while the lower revenue reflects the adverse translation effects of the stronger US dollar, and lower volume.

Ford’s pre-tax results declined compared with a year ago due to lower volume. For the full year, pre-tax results are expected to be about breakeven.

In Asia, pre-tax profit was a record for the second quarter. The improved result was driven by lower costs and favorable exchange. In the quarter, wholesale volume decreased 4 per cent from a year ago because of lower industry sales and market share. Revenue, which excludes Ford’s China joint ventures, declined 15 per cent, reflecting lower volume and weaker currencies. (Revenue = $2.4 billion; pre-tax 192 million).

Ford expects 2015 to be a strong year, with results improving in the second half as compared to the first half. New manufacturing capacity is coming on line and the company launches new vehicles, some with the new EcoBoost gasoline engine. For the full year, pre-tax results expected to be higher than 2014.

                                          Nissan grows 17.6%

Meanwhile, Nissan Motor Company’s fiscal year first quarter financial results for the three months ending June 30, 2015 show a net revenue of 2.90 trillion yen, an increase of 17.6 per cent versus 2.47 trillion yen a year ago.

Operating profit was 193.7 billion yen, up from 122.6 billion yen, a 58.0 per cent increase. Net income was 152.8 billion yen, an increase of 36.3per cent versus 112.1 billion yen in the prior year.

Nissan unit sales increased 4.4 per cent in a market that increased 1.5 per cent. Market share rose to 5.9per cent, up from 5.7 per cent the previous year. The company sold 1,294,000 vehicles during the period.

During the period, Nissan launched the all-new Maxima in the U.S. and expanded introduction of the NP300 Frontier to Latin America and the Caribbean. The Insurance Institute for Highway Safety awarded the Murano a "Top Safety Pick Plus" vehicle safety rating, and the Sentra was named top Compact Car in the J.D. Power and Associates Initial Quality Study (IQS).

Infiniti improved to the fifth position in the J.D. Power IQS, securing recognition as the largest rank improvement of any brand. All Infiniti models performed above average in their respective segments, and the QX70 and QX80 were awarded top honors in their segments.

Nissan continued to benefit from strong sales of models from the Common Module Family developed within the Renault-Nissan Alliance, the Qashqai, Rogue and X-Trail. Nissan ended the period as best-selling Asian brand in Europe.

In the first quarter Nissan maintained its zero-emissions leadership. Total sales since launch of the all-electric LEAF have passed 180,000 units, and the company continued to expand its presence in electric commercial vehicles with the e-NV200.

On a management pro forma basis, which includes the proportional consolidation of results from Nissan's joint venture operation in China, fiscal year first quarter net revenue increased to 3.12 trillion yen, up 16.0 per cent year-on-year. Operating profit was up 41.0 per cent versus the same period last year, to 219.7 billion yen, resulting in a 7.0 per cent operating profit margin.

As to 2015, Nissan reaffirms its global sales forecast for fiscal 2015. With a number of new models in the pipeline, including the Titan pick-up truck in the US, powered by the new Cummins ISV5.0 diesel engine, and the Lannia sedan in China, the company expects to sell 5.55 million units this fiscal year, up 4.4 per cent and equivalent to global market share of 6.5 per cent.

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