Ford Motor Co posted lower-than-expected first-quarter profit on Friday as the No. 2 U.S. automaker increased warranty reserves in North America for older vehicles by $400 million.
Net income fell 39 percent to $989 million, or 24 cents a share, from $1.61 billion, or 40 cents a share, in the year-earlier period.
The quarter included $400 million in additional costs for warranty reserves in North America for vehicles from as early as the 2001 model year, and $100 million in costs related to higher freight and other items due to the quarter’s harsh winter. It also included previously disclosed costs of $400 million, mostly due to the currency devaluation in Venezuela.
Excluding one-time items for European restructuring, Ford earned 25 cents a share, 6 cents below analysts’ estimates in a poll by Thomson Reuters I/B/E/S, or about the same amount as the warranty reserves.