Ford Motor Credit's Q2 Net Income Softens
July 25, 2012
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DEARBORN, Mich. — Because of fewer lease terminations, which
resulted in less vehicles sold at a gain, as well as lower financing margin, Ford
Motor Credit revealed this morning a year-over-year dip in net income.
The Blue Oval's captive finance company generated a second-quarter net income total of $296 million, down from $383 million a year earlier.
On a pre-tax basis, Ford Credit earned $438 million in the second quarter, compared with $604 million in the previous year.
Ford Motor Credit chairman and chief executive officer Mike Bannister kept positive in commenting about the quarterly performance.
"We had another solid quarter, led by our ongoing strong credit-loss performance," Bannister emphasized.
"We are on track to achieve our projected full year pre-tax profit," he continued. "Our business plan is working, delivering profits and distributions for Ford, and support of Ford vehicle sales around the world."
When the company's second quarter closed on June 30, Ford Credit determined its net receivables totaled $84 billion, compared with $83 billion at the end of 2011.
Executives noted their managed receivables were $86 billion on June 30, up from $85 billion on Dec. 31.
As of the close of the second quarter, Ford Motor Credit indicated its managed leverage was 8.1 to 1, compared with 8.3 to 1 at end of the 2011.
Ford Credit distributed $100 million to its parent in the second quarter.
The company continues to expect full-year pre-tax profit of about $1.5 billion, and total distributions to its parent of between $500 million and $1 billion.
"Ford Credit now projects managed receivables at year end to be in the range of $85 billion to $90 billion, and managed leverage of 8-9:1 for the foreseeable future, which is a decrease from the prior target of 10-11:1 and is consistent with its goal of achieving and maintaining a strong investment grade balance sheet," executives concluded.
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