Ford Motor Company’s (F) CEO Mark Fields on Q3 2014 Results – Earnings Call Transcript

Ford Motor Company (NYSE:F)hosted a conference call with investors and analysts to discuss Q3 2014 earnings results on October 24, 2014 at 11:00 a.m. ET. The following are the webcast audio and the associated transcript of the event…

Ford Motor Company (NYSE:F)

Q3 2014 Earnings Conference Call

October 24, 2014 11:00 AM ET


George Sharp – Executive Director, IR

Mark Fields – President and CEO

Bob Shanks – EVP and CFO

Neil Schloss – VP and Treasurer


Colin Langan – UBS

Daniel Galves – Credit Suisse

John Murphy – Bank of America Merrill Lynch

Brian Johnston – Barclays

Rod Lache – Deutsche Bank

Patrick Archambault – Goldman Sachs

Adam Jonas – Morgan Stanley

Joseph Spak – RBC Capital Markets

Ryan Brinkman – JPMorgan

George Galliers – ISI Group

Mike Ramsey – The Wall Street Journal


Good day ladies and gentlemen, and welcome to the Ford Third Quarter Earnings Conference Call. My name is Glenn and I will be your event manager for today.

At this time all participants are in listen-only mode, and later we will facilitate a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. George Sharp, Executive Director of Investor Relations. Please proceed, Mr. Sharp.

George Sharp

Thank you, Glenn, and good morning. Welcome to everyone joining us today either by phone or by webcast. On behalf of the entire Ford management team, I’d like to thank you for taking the time [Technical Difficulty] third quarter 2014 financial results.

Now presenting today are Mark Fields, our President and CEO; and Bob Shanks, Chief Financial Officer. Also participating are Stuart Rowley, our Corporate Controller; Neil Schloss, Corporate Treasurer; Paul Andonian, Director of Accounting; and Mike Seneski, Ford Credit CFO.

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Now copies of this morning’s press release and presentation slides are available on our Investor and Media websites. The financial results discussed today are preliminary and include references to non-GAAP financial measures. Now any non-GAAP measure is reconciled to the U.S. GAAP equivalent in the appendix of the slide deck, and final data will be included in our Form 10-Q. Finally, today’s presentation includes some forward-looking statements about our expectations for Ford’s future performance, of course, actual results could be different.

The most significant factors that could affect our future results are summarized at the end of the presentation and detailed in our SEC filings.

With that, I would now like to turn the presentation over to Mark.

Mark Fields

Thanks, George. Today we will review our third quarter financial results, the details behind them, and our outlook ahead. So let’s get right into the first slide.

Our results this quarter are underpinned, once again by our ONE Ford plan which remains unchanged. We are continuing to focus on all four elements of our plan; they served us well and will continue to be our focus going forward. We also plan to build on our success by accelerating the pace of progress throughout our business. In many ways we are just starting to see the full benefits and strength of ONE Ford and we intend to maximize these opportunities going forward.

At the same time, we are passionate about product excellence and leading in innovation. We are committed to building on the product strength today, with even more new products and innovations that will deliver growth for our stakeholders and define our company going forward.

So now let’s turn to Slide 2 for a look at the third quarter. The third quarter was our 21st consecutive profitable quarter and we ended the period with strong liquidity. Automotive operating related cash flow however was negative due to unfavorable changes in the working capital, including product launch effects. Third quarter wholesale volume and revenue declined year-over-year by 3% and 2% respectively. Market share however was higher in Europe and our third quarter record in Asia Pacific, where we once again delivered a record share in China.

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North America and Asia Pacific were profitable where pre-tax results were lower than a year ago for all of our automotive business units, except Middle East and Africa. Ford Credit delivered strong results that were better than a year ago. Company’s pre-tax profit was in line with our expectation and consistent with the guidance we provided at the September Investor Day of company full year pre-tax profit of about $6 billion which we are reconfirming today. It was however, lower than a year ago. This is more than explained by three factors; lower volume, higher warranty costs, and adverse balance sheet exchange effects.

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