Higher costs hit Ford earnings in 1st quarter

Ford announces a North American recall because of loose steering wheel bolts in its Fusion and Lincoln MKZ sedans (AFP Photo/Mandel Ngan) (AFP)

New York (AFP) - Ford reported lower profits Thursday, citing higher commodity costs and increased investment in autonomous vehicles and other technologies.

Net income fell 35.3 percent to $1.6 billion.

Revenues rose 3.8 percent to $39.1 billion.

Ford chief executive Mark Fields described the quarter as "an investment in Ford's future," as reflected by new vehicle announcements and a $1 billion initiative in autonomous vehicle technology.

Factors negatively affecting earnings included lower overall vehicle volumes. The company had also announced that it was spending $295 million in one-time costs for auto safety recalls.

On the positive side, the value of Ford transactions was much above the industry average due to demand for popular vehicles, including the F-series truck, the top selling vehicle in the US in 2016.

US auto sales hit fresh records in 2016, but industry experts expect some cooling in 2017. Ford projected sales would dip to 17.7 million vehicles, down from 17.9 million last year.

Automakers have been boosting incentives on smaller vehicles, although demand for sport utility vehicles and other large cars remains strong.

Ford's earnings translated into 39 cents per share, three cents above analyst expectations.

Shares rose 2.2 percent to $11.85 in pre-market trade.