Ford 1Q profit down

Associated Press

DEARBORN, Mich.

Costly product recalls and lower sales took a bite out of Ford’s first-quarter profit.

Ford Motor Co.’s net income fell 35 percent to $1.6 billion, or 40 cents per share, in the first quarter.

The Dearborn-based automaker had warned investors and analysts to expect weaker results in the January-March period. Ford earned a record pretax profit in the first quarter of 2016.

Without one-time items, including a gain from canceling a planned plant in Mexico, Ford earned 39 cents per share. That beat Wall Street’s forecasts. Analysts polled by FactSet expected earnings of 35 cents per share.

Ford Chief Financial Officer Bob Shanks said the year will be bumpy, with the lowest profits coming in the third quarter because of scheduled plant closures. Rising costs for steel and other materials will also hurt Ford’s results this year.

But Shanks said the company remains on track for a pretax profit of $9 billion for the full year. That’s down from $10.4 billion in 2016.

Quality issues dogged the automaker. Ford listed $467 million in warranty costs for the quarter, including two product recalls in March that cost the company $295 million. Ford recalled more than 360,000 vehicles because of the risk of engine fires and 210,000 vehicles for defective door latches.

Those actions were in addition to a recall last fall of 2.4 million vehicles to fix door latches that cost Ford $600 million.

Ford CEO Mark Fields said Ford’s quality is improving. The brand moved up one spot last year in J.D. Power’s initial vehicle quality study, for example.