Ford swings to $100M profit in 1Q, Volvo loses $151M
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Ford Motor Co. surprised Wall Street on Thursday with a $100 million profit in the first quarter as strong results from Europe and South America helped offset the impact of a slumping U.S. economy that cut car and truck sales in its main market. Its shares rose almost 6 percent.
It was the company’s first profitable quarter since the second quarter of 2007, when it earned $750 million. Ford reported a full-year loss of $2.7 billion last year, and cautioned that the rest of this year will be tough.
Ford also lowered its industrywide U.S. vehicle sales forecast for the full year to a range of 15.3 million to 15.6 million. In January it had expected full-year sales of 16 million.
Ford says it earned 5 cents per share in the January-March period. The Dearborn-based automaker lost $282 million, or 15 cents a share, in the same period last year.
Excluding special items, the company said it earned $525 million after taxes, or 20 cents per share. That beat Wall Street’s expectations. Analysts surveyed by Thomson Financial had predicted a loss of 16 cents per share.
Ford’s shares rose 43 cents, or 5.8 percent, to $7.95 in morning trading.
Despite the profit, Ford said it will lose money in 2008, but Mulally said the company is on track to return to profitability in 2009 as planned — despite worse-than-expected U.S. economic conditions.
“The underlying business is improving,” Mulally said.
Ford still plans to spend $12 billion to $14 billion per year through 2009 to cover losses and pay for restructuring costs.
Mulally said there will be further production and hourly employee cuts this year.
The profit came despite a $45 million pretax loss in Ford’s core North American automotive market. That was an improvement over a $613 million loss in the year-ago quarter, driven by $1.2 billion in cost reductions that helped buffer a U.S. sales decline.
Ford said it earned $257 million pretax in South America, up from $113 million a year ago. In Europe, it made $739 million, compared with $219 million in the first quarter of last year.
Volvo had a pretax loss of $151 million, compared with a profit of $94 million a year ago. It was the first quarter the company broke out earnings for the Volvo unit. Previous years Ford has not announced Volvos earnings. Will Ford put Volvo also on sale like it did with Aston Martin, Jaguar and Land Rover?
Source: Yahoo Finance
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