Ford Credit Performing Well Despite Earnings Decrease, Say Officials
Company officials partially attribute Ford Motor Credit Company’s $173 million decrease in earnings to reductions in credit loss reserves and other expenses, the company reported today.
DEARBORN, Mich. — Ford Motor Credit Company reported net income of $383 million in the second quarter of 2011, a decrease of $173 million from the same period last year, according to the company. On a pre-tax basis, Ford Credit earned $604 million, down from $888 million last year.
During the first half of 2011, the company earned $1.3 billion on pre-tax basis, compared with $1.7 billion in the first half of 2010. Company officials attributed the decrease to lower credit loss reserve reductions and the nonrecurrence of lower lease depreciation expense of the same magnitude as 2010, according to the company.
“Ford Credit’s business continues to perform well, with low credit losses and strong originations capability,” said Mike Bannister, chairman and CEO. “We continue to succeed in our mission to support Ford sales.”
On June 30, Ford Credit’s net receivables totaled $84 billion, up from $81 billion at year-end 2010. Managed receivables were $86 billion on June 30, 2011, up from $83 billion on Dec. 31, 2010. The company attributes the higher receivables primarily to changes in currency exchange rates.
For full-year 2011, Ford Credit expects to be profitable, albeit at a lower level than last year, according to the company. At year-end 2011, managed receivables are anticipated to be in the range of $82 billion to $87 billion.
Through June 30, 2011, Ford Credit reported it has paid $1.9 billion in distributions to its parent and expects to pay a total of about $3 billion for full-year 2011.
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