DETROIT -- Ford Motor Co. CEO Mark Fields today delivered the first report card on his performance since taking over for Alan Mulally on July 1. He gave every sign that he'll have more to show off next year. Ford's pretax operating profit in the third quarter tumbled 54 percent from a year earlier to $1.18 billion. Lower sales volume and higher warranty costs took much of the blame. Net income fell 34 percent to $835 million, with comparisons skewed by one-time charges this year and last. Revenues fell 3 percent to $34.9 billion.andnbsp; Ford was profitable in its North America and Asia Pacific regions. But it lost money in South America and the Middle East and Africa. Europe fell back into the red after being profitable, briefly, from April through June. "During the third quarter, we continued to introduce an unprecedented number of new vehicles and invest heavily in the new products and technologies," Fields explained in a statement. Those products, he said, "will deliver strong profitable growth beginning next year." The company is working its way through its busiest product launch schedule ever, with 23 new or refreshed models introduced globally this year. "Twelve of 23 product launches are now complete, and we're continuing to progress," Fields said later during a conference call. The most significant of those launches: a redesigned Ford F-series pickup, one of the automaker's most profitable models. The shutdown of one plant that builds the F-series for all of September to prepare for the redesigned truck severely cut into sales and profits. andnbsp;andlsquo; Challenges' In summing up the quarter, CFO Bob Shanks acknowledged, "We did have some challenges. But everything was in line with what we expected at the end of September" when Fields laid out his projections for investors. At that investor conference, Fields cut Ford's profit outlook for 2014, delivering a jolt to investors who had become accustomed to his predecessor, Alan Mulally , regularly beating Wall Street projections. Fields warned that profits this year would come in at least $1 billion, and as much as $2 billion, below prior guidance. Ford tied the warning to several factors including economic weakness in Russia and South America on top of $1 billion in unplanned warranty expenses. After warning on profits in September, Fields today delivered profits that, while down sharply, were above the consensus of analysts' estimates. Ford reiterated today that it expects its 2014 pretax profits to be about $6 billion, excluding special items, and that its North American operating margin will be at the lower end of its 8 percent to 9 percent guidance range, while the automaker's results in Europe, Asia Pacific and Ford Credit will improve from 2013 levels. Ford shares fell 4.3 percent to close at $13.78 while markets rose. Volume hurts N.A. In the third quarter, Ford's North American region posted a pretax profit of $1.41 billion, down 39 percent, hurt by higher warranty costs and lower volume. Revenues fell 6 percent to $19.9 billion, as wholesale volume slid 8 percent to 665,000 units. The volume drop was due to mainly to product launches, including five weeks of downtime in the quarter at the Dearborn Truck Plant near Detroit for the launch of the redesigned F-150 pickup, and supplier parts shortages. Regarding the F-150, Fields said, "Launches are a complex thing. We are absolutely on plan. We had eight weeks of down time. We now have mass production. We're exactly where we expected to be. Employees are excited; they're trained; they're energized. We're positioned to have initial sales by end of year as we planned." Despite the hurdles, Shanks said, "We still feel the business in North America is operating at an extremely high level." Ford's North American operations were hurt by recall costs of $630 million, primarily due to a $500 million recall of 850,000 2013-14 models -- including Ford C-Max, Fusion, Escape and Lincoln MKZ vehicles -- that the company announced in September to fix electronic modules that control airbags, pretensioners and other safety restraints. In Europe, Ford's pretax loss widened to $439 million from $182 million a year earlier. Ford said the wider loss was more than explained by Russia, currency losses on its balance sheet, lower component pricing and the non-recurrence of year-earlier special gains. European revenues rose 7 percent to $6.9 billion. In July, Ford posted its first quarterly profit in the region in three years. Asia Pacific drops In the Asia Pacific region, pretax profit fell 62 percent to $44 million, as revenues rose 4 percent to $2.6 billion on a more favorable mix of sales. The revenue figure excludes Ford's joint ventures in China. Finance chief Shanks said the profit decline was due to the costs of opening five new factories in the region in the next nine months plus the cost of launching the Lincoln brand in China. He said Lincoln recorded its first sale in China today. Eight Lincoln dealerships will be open by the end of 2014. In South America, Ford swung to a pretax loss of $170 million from a pretax profit of $160 million a year earlier, as revenues slid 17 percent to $2.3 billion. Ford cited lower volume and currency losses for the red ink. "Ford is working to manage the effects of slowing GDP growth, declining industry volumes in its larger markets, weaker currencies and high inflation, as well as policy uncertainty in some countries," the automaker said. In the Middle East and Africa region, pretax losses narrowed to $15 million from $25 million a year earlier, as revenues rose 5 percent to $1.1 billion. Ford Motor Credit's pretax profit rose 17 percent to $498 million, on higher volume. The company said Ford Credit saw increases in nearly all financing products, including consumer and non-consumer products globally and leasing in North America. Negative cash flow Ford's automotive operating-related cash flow was a negative $700 million for the third quarter, the first time since the first quarter of 2010 it has been negative, Shanks said. That was due to unfavorable changes in working capital, including the effects of the downtime at the Dearborn Truck Plant. Ford said it expects working-capital changes in the fourth quarter to be positive. Ford ended the quarter with automotive gross cash of $22.8 billion, exceeding debt by $7.9 billion. Three months ago, Ford's gross cash total of $25.8 billion was $10.4 billion more than debt. A big chunk of the decline in gross cash was the $1.1 billion conclusion of a $1.8 billion share-buyback program the company announced in May. The company's cash flow also was hurt by $1.8 billion in capital spending, reflecting expenses related to the new-vehicle launches. Ford said supplier parts shortages also contributed to the negative cash flow. There were shortages at four North American plants, which Shanks declined to name. "We're not going to identify the suppliers and models," Shanks said. "There were four different issues. We are not going to make it up fully in the fourth quarter." Fields said the parts shortages were on existing models and not new models in the launch process: "Our new launches are going according to plan." The new CEO, who today added to Mulally's streak of 20 straight quarterly profits, will be watched as those launches play out.andnbsp; "With Ford, we have a management team that is no longer experiencing the halo effect of Alan Mulally running the show," Michael Razewski, a New York-based principal at Douglas C. Lane and Associates said before today's release. "Now it's about execution. You've got the product, go out there and sell it, don't make mistakes, high quality, no recalls." Bloomberg contributed to this report.