Stubborn warranty costs push down Ford’s 2Q net profits, causing stock plunge in after-hours trading WSOC TV [Video]

DETROIT — (AP) — In October of 2020, Ford’s then-new CEO Jim Farley said the company was working to cut warranty costs after glitch-prone small-car transmissions hit the automaker’s bottom line.

Nearly four years later, warranty costs are still vexing the nation’s second-largest automaker and lopping billions off of its profits.

Ford Motor Co. reported Wednesday that its second-quarter net income fell 4.7% from a year ago as its combustion-engine unit posted a pretax loss due to rising warranty and recall costs.

The profit drop and lingering quality problems knocked net income to $1.83 billion from April through June, compared with $1.92 billion a year ago. It caused Ford to badly miss Wall Street estimates for adjusted earnings per share, touching off a stock plunge in after-hours trading.

Warranty and recall costs last quarter, the company said, totaled $2.3 billion, $800 million more than the first quarter and $700 million more than a …