When Ford Motor Co. (NYSE: F) reported second-quarter 2017 results before markets opened Wednesday, the automaker posted adjusted diluted earnings per share (EPS) of $0.56 on revenues of $39.9 billion. In the same period a year ago, the company reported EPS of $0.52 on revenues of $39.5 billion. Analysts were looking for EPS of $0.43 and $37.1 billion in revenues.

Adjusted pretax profit fell 20%, from $3.0 billion in the second quarter of 2016 to $2.5 billion. The company blamed the drop on higher commodity costs, mainly steel, as well as unfavorable foreign exchange rates and a one-time divestiture in the prior year quarter.

Average transaction prices rose by $3,100 year over year on the company’s best-selling F-Series pickups, and Ford said year-over-year transaction prices rose nearly five times the industry average in the quarter and incentives declined as a percentage of vehicle price compared with an incentive increase across the industry.

CEO Jim Hackett said:

This quarter shows the underlying health of our company with strong products like F-Series and commercial vehicles around the world, but we have opportunity to deliver even more. The entire team is focused on improving the fitness of the business and smartly deploying our capital to improve both the top and bottom lines in the quarters ahead.

Automotive revenues totaled $37.1 billion for the quarter, up by $100 million year over year, but operating margin fell by 1.8 percentage points to 5.9% and pretax profit dipped by $600 million to $2.2 billion.

North American sales totaled 807,000 units and revenues of $24.5 billion. Ford said it had 14.4% of the North American market, down 0.1 points from last year. Operating margin fell by 2.3 points to 9.0%.

Ford now expects adjusted EPS of $1.65 to $1.85 and positive operating cash flow in the automotive segment.

The consensus analysts’ forecast for third-quarter 2017 EPS is $0.30 on revenues of $33.35 billion. For the full year the consensus estimates call for $1.51 in EPS and revenues of $142.85 billion.

The raised EPS estimate is mostly due to a lowered adjusted effective tax rate of about 15%. More revenue and better margins would be a more impressive booster, but a tax-rate break is better than nothing.

Ford’s shares traded down about 2.5% early Wednesday to $10.99, in a 52-week range of $10.67 to $13.99. The consensus 12-month price target on the stock was $12.67 before this morning’s report.

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