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Tax change boosts Ford

Ford Motor Co. had a better-than-expected second quarter despite lower sales and upheaval in its executive ranks.

Net income rose 4 per cent to $2 billion, thanks in part to a change in the company's tax rate and a strong performance from its credit arm.

Adjusted profits of 56 cents per share easily surpassed Wall Street expectations of 43 cents, according to analysts polled by FactSet. One-time items included a $248 million charge as the company shifted production of the Ford Focus from Mexico to China.

Ford's automotive revenue of $37 billion was in line with Wall Street's expectations. Total revenue rose 1 per cent to $39.85 billion.

The elevated performance in the second quarter was due mostly to a lowering of the company's corporate tax rate, from 30 per cent down to 10 per cent, Shanks acknowledged. Ford has put some overseas losses back on its books in anticipation of changes in the U.S. corporate tax code, Shanks said. The company expects to have a 15 per cent rate this year, but that will return to 30 per cent next year.



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