Ford profit dives on weak North America, recall costs

US auto giant Ford posted Friday a large decline in first-quarterprofit as sales fell in its key North America market and costs rose for vehicle recalls.The second-largest US automaker blamed bad winter weather in part for itsdisappointing performance in North America. Other negative factors included anunfavorable exchange rate in South America."While similar factors could occur in the future, it is unusual for items like these tooccur in this magnitude in the same quarter," Ford said in a statement.Net income was $989 million in the first three months of the year, down 39 percentfrom $1.6 billion a year ago.Adjusted earnings of 25 cents per share came in six cents below Wall Streetexpectations.Revenue rose 0.8 percent to $35.9 billion, beating estimates.Ford president and chief executive Alan Mulally, who is expected to leave thecompany this year after a seven-year run, said the automaker had a "solid" quarteras it transitions into an ambitious program for the year that includes the launch of 23 new global vehicles."We are on track with our most aggressive product launch schedule in our history,"said Mulally.Mulally is widely regarded as helping to restore Ford's luster, steering the companyclear of a government bailout during the 2008 financial crisis and overseeingimpressive sales growth. Earnings rose 26 percent in 2013 to $7.2 billion.Global auto sales volume rose six percent and revenue climbed one percent from the2013 first quarter.The Dearborn, Michigan-based company said it scored continuing market-sharegains in the Asia-Pacific region, including a record share in China.In North America, Ford's largest market, wholesale auto sales fell two percent involume and revenue declined five percent. Pre-tax profit fell to $1.5 billion, down$892 million from the year-ago record profit.The lower results reflected higher costs of $500 million linked to weather-relatedcharges and vehicle recalls.South America pre-tax losses more than doubled to $510 million.Ford said it expects lower full-year earnings in North America and a wider loss inSouth America.- Upward trends -The Asia Pacific region swung into pre-tax profit of $291 million from a $28 millionloss a year ago.Leading the growth was China, the world's largest auto market, where wholesaleauto sales volume soared 45 percent. Ford plans to introduce at least 15 new modelsin China this year, including its luxury Lincoln car. It has opened three new factoriesin the country since 2012, and four plants are under construction .Ford forecast the Asia-Pacific region would exceed 2013 profits this year.The automaker shaved its loss in Europe by almost half, to $194 million, as itrestructures operations to reduce costs. Ford confirmed it expects the region tobecome profitable in 2015.Ford confirmed its 2014 full-year outlook of pre-tax profit between $7 billion to $8billion, below its record $8.6 billion in 2013.Ford shares tumbled 3.2 percent to $15.80 on the New York Stock Exchange.JPMorgan analyst Ryan Brinkman said that Ford was stronger than the disappointing earnings number suggested."We believe when the dust settles, investors will conclude that Ford's underlyingoperations are performing well despite this being a 'transition year' on a recordnumber of new product launches, setting the company up for even betterperformance down the line," he said.