Ford Motor Co. said Friday its net income fell by 45 percent in the first quarter as European sales plummeted and the company paid higher taxes.
Ford said it will try to cut its pension costs by offering lump-sum payments to about 90,000 U.S. white-collar retirees and former employees. Ford said it is the largest such offer in U.S. history. Payouts will start later this year and come from pension plan assets. Ford doesnt know how much the plan will cost.
Ford earned $1.4 billion, or 35 cents a share, in the first quarter. That was down from $2.5 billion, or 61 cents, a year earlier.
Ford said nearly half the decrease was because of paying a higher tax rate. The company recently moved tax credits and other assets back onto its books, after moving them off in 2006 when it wasnt making a profit. Ford is now paying a 32.5 percent tax rate, compared with 8 percent a year earlier.
Automakers may have dodged resin shortage
The auto industry may have steered its way around another crisis, avoiding a second major disruption of its supply chain in a year.
Just last week, automakers and parts companies feared that factories could be forced to close due to a shortage of a key plastic resin. Supplies are low because a March explosion and fire knocked out a German factory that makes much of the worlds PA-12, a unique resin used to manufacture fuel lines and other parts. The plant could be out until winter.
But on Friday, Ford gave the strongest indication yet that problems may be avoided. The automakers chief financial officer said he doesnt expect any Ford factories to be stalled because of the shortage. That is largely because the company has substitutes for PA-12.
Procter & Gamble net income slips
Procter & Gamble Co. said Friday that it is rolling back some price increases and focusing on introducing products in developed markets as the worlds largest consumer product maker seeks to reignite market share growth.
The maker of products ranging from Bounty paper towels to Luvs diapers also lowered its guidance below expectations for the fiscal year as it its third-quarter net income dropped 16 percent, hurt by restructuring charges and continued high costs for items like diesel fuel and packaging.
Consumer product companies across the board have been raising prices to deal with higher costs for materials like pulp, fuel and packaging.
P&G rival Kimberly-Clark said last week that higher prices helped boost its quarterly earnings 34 percent. But results for P&G, whose products also include Tide detergent and Olay skin cream, illustrate that even big companies that sell trusted brands can lose customers to lower-priced rivals when they raise prices.
Operations revenue up for Simon Property
Simon Property Group Inc., the nations largest mall operator, said Friday that a key metric climbed 14 percent in the first quarter, boosted by higher rents and occupancy rates.
The Indianapolis company said funds from operations, or FFO, rose to $648.7 million, or $1.82 a share, up from $570.6 million, or $1.61 a share, in the same quarter last year.
Analysts surveyed by FactSet expected, on average, FFO of $1.67 a share.