Tax charges weigh on Ford profits Net income at Ford Motor, the US's second-largest carmaker by revenues, fell 1 per cent to $1.63bn in the third quarter as higher tax charges offset sharp improvements in car profitability. Pre-tax profits at the core automotive division rose 33 per cent to $1.78bn, on revenue down 2.9 per cent to $30.2bn. Sharply improved profits and revenues in North America offset pre-tax losses in Europe that deepened to $468m from $306m last time, on revenue down 25 per cent to $5.8bn. In financial services, pre-tax profits fell 36 per cent to $388m on revenue that was down 5 per cent to $1.9bn. Ford reaffirmed its guidance for 2012 pre-tax profits slightly lower than last year's $8.8bn. Pre-tax profits - before a provision for income taxes up to $613m, from $194m last time - improved 22 per cent to $2.25bn. Revenue fell from $33.1bn in the third quarter of 2011 to $32.1bn this time. Alan Mulally, chief executive, said the pre-tax figures were a record for the third quarter. The company last week announced plans to restructure its European business, closing a plant in Genk in Belgium and two smaller plants in the UK. "We are fully committed to transforming our business in Europe by moving decisively to match production to demand, improve revenue through new products and a stronger brand, improve our cost efficiencies and take advantage of opportunities to profitably grow our business," Mr Mulally said. Pre-tax profits in North America rose 50 per cent year on year to $2.33bn, on revenues up 8.3 per cent to $19.5bn. Sales rose 2.6 per cent to 659,000. Bob Shanks, finance director, said Ford in North America was benefiting from a "very, very healthy" cost structure and a brand that was well-regarded and had closed the price discount it previously suffered compared with competitors. "We underpinned that with a lot of new product," Mr Shanks said. A combination of all the factors is giving us very strong results in North America. Pre-tax profits at Ford South America fell to $9m from $276m, on revenue down 23 per cent to $117m. The company put the decline down mainly to the unfavourable effect of a weaker Brazilian real. The Asia-Pacific Africa region returned pre-tax profits of $45m, against a $43m loss last time, on revenue up 21 per cent to $258m. The declining profitability of the financial services segment was the result of a number of factors, including the expiry of some previously high-yielding financing instruments and a reduced number of lease terminations, which reduced the opportunity to make profits on the vehicles" resale. Mr Shanks said the company was seeing no effect on the car industry's recovery from the uncertainty surrounding the US economy. "The industry is being driven in large part by replacement demand," he said. Because the last 10, 15 years we have very high sales rates, we're seeing consumers coming back into the market simply because they have to. Earnings per share were unchanged at 41 cents.