By Nick Carey and Ben Klayman
DEARBORN, Mich. (Reuters) - Ford Motor Co (N:F) on Wednesday reported slightly higher than expected third-quarter profit and stuck to its targets for the year, raising investor hopes for a strong fourth quarter and sending its shares up as much as 7 percent after-hours.
Profit was down as high commodity costs and a China sales slump partially offset strong demand for high-margin pickup trucks and sport-utility vehicles in North America.
The No. 2 U.S. automaker maintained its full-year earnings forecast. Last quarter, Ford announced a pending restructuring that could lead to pretax charges of up to $11 billion. On Wednesday, Chief Financial Officer Bob Shanks said that plan remains in place.
But the CFO said while Ford is still committed to an overall pretax margin target of 8 percent, the company will not hit it by 2020 as previously announced.
Some investors and analysts have been frustrated by a lack of details about the restructuring and Shanks said the company still has nothing to announce at this time.
"Nothing has changed in terms of providing a lot of details," Shanks told reporters at the company's headquarters in Dearborn, Michigan.
"I know it's frustrating," Shanks later told analysts on a conference call. "One can't go to the last page of the book and look at the ending. It's got to sort of unfold."
Ford's vehicle sales in China, where Ford lost $378 million in the quarter, fell 43 percent in September from a year earlier and are down 30 percent in the first nine months of the year. Ford blames its weak China business on an aging model lineup that is awaiting an overhaul.
"Our performance in China clearly has been disappointing. I can assure you the leadership of the company has swarmed the issue," Chief Executive Officer Jim Hackett said on the call.
Ford will accelerate local production of its vehicles in China as part of its push to improve profit there, said Jim Farley, president of global markets.
Late on Tuesday, Ford named a new chief of its China operations, ending a nine-month search and putting in place an American national born in China.
The automaker has said China sales will not get a boost until Ford's new SUVs begin rolling out there in 2019 and 2020.
Speaking to reporters at Ford's headquarters, CFO Shanks said that industry-wide Chinese vehicle sales would decline more than 10 percent in the fourth quarter, and fall in 2019 compared with this year.
Shanks said Ford welcomed the tentative agreement between the United States, Canada and Mexico on an updated version of the North American Free Trade Agreement, but said the automaker would also like to see tariffs on steel and aluminum addressed as part of the revised treaty.
Hopefully those tariffs "will be eliminated and we'll get more normal economic pricing," Shanks said.
Last month, CEO Hackett said U.S. steel and aluminum tariffs would cost the automaker $1 billion in profit in 2018 and 2019. Shanks on Wednesday said the combined impact of the metals and China-related tariffs would approach $1 billion this year.
Virtually all of Ford's quarterly profit came from sales of high-margin pickup trucks like the F-150 and SUVs in North America, where Ford posted an operating profit of almost $2 billion in the quarter. Ford has been increasingly reliant on the full-size F-150 pickup truck to drive results, with Farley saying Ford's market share and average transaction prices rose in the quarter.
Ford said it managed a North American third-quarter pretax margin of 8.8 percent.
The company reported a third-quarter net profit of $993 million, or 25 cents per share, a 36 percent drop from $1.6 billion or 39 cents per share in the year earlier quarter.
Excluding one-time items, Ford earned 29 cents per share in the quarter, 1 cent above average analyst estimates, according to Refinitiv.
Revenue for the quarter rose to $37.7 billion from $36.5 billion a year earlier. Analysts had expected $33.3 billion.
The company said it still expects full-year earnings per share in a range of $1.30 to $1.50, indicating it sees a fourth-quarter profit in the range of 31 to 51 cents a share. Analysts expect a fourth-quarter profit of 31 cents.
Ford shares rose as much as 7 percent in trading after the closing bell.
They had closed at a 9-year low on Wednesday of $8.18. The last time shares hit that level, the industry was being battered by the Great Recession and Ford's U.S. rivals General Motors Co (N:GM) and Chrysler, now part of Fiat Chrysler Automobiles NV (MI:FCHA) had just emerged from government-led bankruptcies.