DETROIT -- Poor results in China and other overseas markets contributed to a 37 per cent drop in third-quarter net income for Ford Motor Co., and the automaker backed off its goal of raising its global profit margin to eight per cent by 2020.
Ford on Wednesday said net income fell to $991 million (the automaker reports earnings in U.S. dollars) in the quarter, although revenue rose three per cent to $37.6 billion, driven by higher-profit vehicles in North America including the redesigned Expedition and Lincoln Navigator SUVs. Ford's earnings before interest and taxes fell 27 per cent to $1.7 billion.
"This quarter shows that our business remains very strong in key areas," CEO Jim Hackett said in a statement. "We continue to make progress on our efforts to redesign Ford to be far more competitively fit, disciplined in capital allocations and nimble enough to win in a fast-changing world."
But Ford said its challenges overseas, as well as higher costs and uncertainty clouding the entire auto industry, mean it no longer forecasts achieving the 8 per cent profit-margin target it set previously. CFO Bob Shanks declined to offer an alternate timeframe for reaching that threshold.
"We're just working to get there as quickly as we can," Shanks told reporters.
Ford's profits in the quarter were driven by North America, where earnings rose 7.5 per cent to $1.96 billion. Its profit margin for the region was unchanged from the same period a year ago at 8.8 per cent.
The automaker posted losses in South America, Europe and its Asia Pacific region. It posted lower revenue, market share and sales in China, the world's largest vehicle market.
Ford lost $208 million in Asia Pacific in the quarter. Excluding China, it made $170 million in the region.
The automaker on Tuesday said it would separate its China business into a standalone unit and appointed Anning Chen, a former Ford executive with 25 years of industry experience, to become CEO of Ford China on Nov. 1.
Ford reaffirmed its full-year target of adjusted earnings per share of $1.30 to $1.50. The company had previously lowered its guidance from a range of $1.45 to $1.70 per share, citing troubles in Europe and China.