DETROIT -- Ford Motor Co. reported second-quarter net income of $2.04 billion, up 3.7 per cent from the same period a year ago because of a favorable tax rate.
But pre-tax profits fell 16 per cent to $2.51 billion because of higher steel costs, an unfavorable foreign-currency exchange rate and other factors. Revenue rose 0.9 per cent to $39.85 billion.
Ford's tax rate was only 10 per cent in the quarter, less than a third of the 32 per cent rate it paid in all of 2016.
The automaker took a $248 million charge in the quarter to end production of the Focus compact car in South America, a decision made public for the first time Wednesday. A Ford spokesman declined to say when production would end. The move follows news that Ford will end Focus output in North America next year and begin importing the car from China in 2019.
Ford's profits also were hurt by a $142 million charge for a June recall of 402,462 Transit vans in North America for driveshaft separations.
"This quarter shows the underlying health of our company with strong products like F-Series and commercial vehicles around the world, but we have opportunity to deliver even more," CEO Jim Hackett said in a statement.
Because Ford Canada is a wholly owned subsidiary of Ford Motor Co., its profits are reported as part of the overall North American financial results for the U.S.-based automaker. However, Ford Canada’s total sales to customers rose nearly 10.5 per cent from a year earlier to 97,618 vehicles.
The automaker had its best April and May in Canada since 1989 with 30,401 and 34,486 vehicles sold, respectively.
"The entire team is focused on improving the fitness of the business and smartly deploying our capital to improve both the top and bottom lines in the quarters ahead," Hackett said.