profitable
Ford Motor Credit (FMC) has reported a pre-tax profit of $546m
(£259m) in Q3 2007, down from $730m (£346m) in the same period last
year.
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However, its results are rather better than those of its
rival GMAC, which lost $1.6bn (£760m), as FMC does not have the
exposure to the subprime mortgage market that was so damaging to
GMAC, a more diversified lender.
While revenue from retail finance was down in Q3 2007 from
the year-ago period, to $884m (£419m) from $938m (£445m), this was
offset by growth in revenues from operating leases to $1.61bn
(£764m), from $1.44bn (£683m) in Q3 2006.
The hit taken by FMC on depreciation in leased vehicles rose
from $1.37bn (£650m) in Q3 last year to $1.60bn (£760m) this
year.
In all, FMC reported net income of $334m (£158m) for the
quarter, from $452m (£214m) a year ago. The captive said that it
had been adversely affected by a number of factors, primarily “the
non-recurrence of credit loss reserve reductions, higher
depreciation expense for leased vehicles and higher borrowing
costs.”
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By GlobalData FMC’s portfolio of net receivables rose to $141bn (£67bn) as
of September 30 2007, up 4.4 per cent from $135bn (£64bn) on
December 31 2006.
“Our sound risk management practices, high-quality portfolio,
strong liquidity and ongoing restructuring continue to produce
solid operating results,” said Mike Bannister, chairman and CEO of
FMC. “As we effectively execute the fundamentals of the business,
we remain on track to meet our earnings outlook.”
The captive expects to earn between $1.3bn-$1.4bn (£615m-£660m) in
2007.
Its parent manufacturer Ford reported a loss of $380m in the third
quarter, and may even end 2007 on a break-even basis, it was
reported.
