Ford to cut costs; earnings rise 9 percent
Ford’s net income rose 9 percent in the first quarter due largely to a lower income tax rate, as the automaker promised additional efficiencies in the coming years.
The automaker says it made $1.74 billion, or 43 cents per share, compared with $1.59 billion, or 40 cents per share a year ago.
The company also says it has found another $11.5 billion in cost cuts and efficiencies, bringing the total to $25.5 billion expected by 2022. Savings will come from engineering, product development, marketing, materials and manufacturing.
Ford on Wednesday promised to raise its operating profit margin from 5.2 percent to 8 percent by 2020, two years earlier than a previous forecast.
Revenue rose 7 percent to $41.96 billion.
Earnings and revenue beat Wall Street estimates. Analysts polled by FactSet expected 41 cents per share and revenue of $36.78 billion.
One third of Ford’s efficiencies will come by the end of 2020, Chief Financial Officer Bob Shanks said told reporters.
Saving will come by optimizing digital marketing and discounts on vehicles, as well as putting multiple vehicles on one architecture. The company also plans to redesign its manufacturing freight network.
Shanks said the company will cut $5 billion from capital spending from 2019 to 2022, reducing it from $34 billion to $29 billion. The company will spend less on low-performing areas such as small cars and most Lincoln vehicles, although Shanks said Lincoln sales are growing and the brand is not in jeopardy. More capital will be allocated to higher performing areas such as trucks and sport utilities, he said.
Twitter users increase to 336 million
Growth in ad sales and monthly users outside the United States were among the key figures that spurred a strong quarter for Twitter as the social-media company on Tuesday reported first-quarter sales that exceeded Wall Street’s expectations.
Twitter, which put out its results before the stock market opened Tuesday, said it ended the first three months of 2018 with 336 million monthly active users, an increase of 6 million such users over the fourth quarter of 2017. Five million of those new users came from international markets, while Twitter added 1 million new users in its U.S. home base.
Wall Street analysts had expected Twitter to finish its first quarter with 334 million monthly active users.
The company has been working on more methods to keep visitors on the site for longer than it takes to post a tweet. Live programs, including sports and information shows, have helped Twitter in its efforts to sell more video ads, which are fueling the company’s revenue gains.
Travel growth lifts Boeing net income
The desire by people to see the world is giving Boeing a huge lift, and executives at the aircraft maker say travel is a long-term growth industry.
After all, they reason, only about one in five people has ever flown on a plane, so there is plenty of upside to keep building them.
Airline profits remain healthy, and through February passenger traffic was up nearly 6 percent from a year ago, Boeing executives said Wednesday as they announced first-quarter earnings and revenue above Wall Street expectations.
The Chicago company also raised its profit forecast for the full year. Boeing shares were up 12 percent since the start of this year and 79 percent in the past 12 months as of Wednesday morning. They climbed another $5.12, or 1.6 percent, to $334.18 in midday trading.
Boeing has a backlog of 5,835 airliners valued at $415 billion – although airlines usually get big discounts. That’s enough to last several years if the company never won another order. This month it got a twin boost when American Airlines ordered 47 more of its 787 Dreamliner jets and Hawaiian Airlines signed its intent to buy 10 of the twin-aisle planes for international routes. The airlines’ decisions were a setback for Boeing European rival, Airbus.
Boeing said first-quarter profit rose 57 percent to $2.48 billion. Excluding non-repeating gains, the company said core earnings were $3.64 per share, easily beating analysts’ prediction of $2.59 per share, according to Zacks Investment Research.
Revenue grew 6 percent to $23.38 billion on delivery of 184 commercial planes
Twitter said it ended the quarter with a profit of $61 million, or 8 cents a share, on revenue of $664.9 million. Revenue from advertising reached $575 million, up 21 percent from a year ago. Excluding one-time items, Twitter said it earned 16 cents a share, to top the estimates of analysts, who had forecast the company to earn 12 cents a share on $606.9 million in total sales.