Ford Swings to Surprise ProfitBy Reuters - | Posted 2008-04-24 Email Print
Ford is showing some financial life.
DETROIT (Reuters) - Ford Motor Co (F.N: Quote, Profile, Research) posted an unexpected quarterly profit on Thursday, led by strong results in Europe and South America and a narrowing loss in North America, sending its shares up nearly 8 percent.
The automaker also cut its second quarter North American production plan and said it would offer more targeted buyouts to union workers at specific plants after getting about 4,200 workers to accept recent offers to leave the company.
Ford expects the rest of 2008 to be challenging, cutting its full-year North American outlook for industry sales, but said it remains committed to returning North America and its whole auto business to profitability in 2009.
"Particularly impressive was the continued strength in Europe," Calyon Securities analyst Mark Warnsman said in a research note. "The outstanding result in Europe would have meant little, however, if North America had not pulled itself back to close to breakeven."
Ford reported net income of $100 million, or 5 cents per share, compared with a net loss of $282 million, or 15 cents per share, a year earlier. Revenue fell 8 percent to $39.4 billion excluding the Jaguar Land Rover unit it is selling to Tata Motors Ltd (TAMO.BO: Quote, Profile, Research).
Ford expects to complete the Jaguar Land Rover sale by the end of the second quarter.
Ford reported a profit from continuing operations of $525 million, or 20 cents per share, excluding special items, while analysts on average expected Ford to report a loss of 14 cents per share on that basis, according to Reuters Estimates.
Like other U.S. automakers, Ford has been struggling with market share losses and a dramatic shift in consumer demand away from large sport utility vehicles to cars and smaller crossover SUVs built on passenger car platforms.
Ford was surpassed by Japanese rival Toyota Motor Corp (7203.T: Quote, Profile, Research) as No. 2 in auto sales in the United States last year. The slowing U.S. economy and rising gasoline prices have pressured U.S. auto sales in 2008 overall.