Thursday April 24, 01:35 PM
Ford posts surprise profit in quarter
CHICAGO (AFP) - Ford Motor Co. produced a profit of 100 million dollars in the first quarter in a surprise turnaround for the struggling auto giant that has been mired in deep losses.
The number two US automaker swung to profit from a loss of 282 million dollars in the same period a year ago and a 2.7 billion-dollar deficit for all of 2007.
The profit amounted to five cents a share, far better than the average analyst estimate for a loss of 16 cents.
Revenues excluding special items fell 8.3 percent to 39.4 billion dollars for the quarter but were also better than analyst estimates of 38.4 billion.
The results do not include the recent sale announced of British nameplates Jaguar and Land Rover to India's Tata Motors as part of a massive reorganization for Ford.
"The results of this quarter are encouraging, particularly our outstanding performance in Europe and South America," said Ford president and chief executive Alan Mulally.
"In the past several years, we have substantially restructured these businesses. We believe this is an indication that our efforts to leverage Ford's global assets across the world will bear fruit. Going forward, we remain committed to our key business objectives, including our goal of reaching North America and overall Automotive profitability in 2009 despite the challenging economic conditions."
Despite the surprise profit, Ford said it expected to show a loss for the full year 2008 "equal to or better" than its 2007 deficit, dragged down by continued problems in North American automotive operations.
"The remainder of 2008 will be a challenge but we are cautiously optimistic despite the external challenges," Mulally said.
"Our plan is working. Our initial quality is now among the best in the business, the restructuring in North America is taking hold and we will continue to take actions to stay on our plan."
Ford's North America automotive operations narrowed its loss to 45 million dollars in the quarter from a loss of 613 million a year earlier as the company slashed 1.2 billion dollars from costs. Revenues fell to 17.1 billion dollars from 18.5 billion.
For the first quarter, Ford's South America operations posted a pre-tax profit of 257 million dollars, up from 113 million a year ago, on revenues of 1.8 billion dollars.
In Europe, the company's profit increased to 739 million dollars from 219 million on revenues of 10.2 billion.
Ford's Asia-Pacific (002790.KS - news) unit shows a modest profit of one million dollars, compared with a loss of 26 million last year.
The Volvo division saw a loss of 151 million dollars compared with a profit of 94 million a year earlier. The Mazda unit produced a 49 million-dollar gain, up from 21 million.
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