Ford boasts $2.1 billion profit for first quarter
SAN FRANCISCO – Ford Motor Co. said Tuesday that it earned more than $2 billion in the first quarter, reversing a loss of almost the same amount a year ago and building toward a “solidly profitable” end to 2010.
“The basic engine that drives our business results – products, market share, revenue and cost structure – is performing stronger each quarter,” CEO Alan Mulally said in a conference call.
But despite the better-than-expected results and his mostly upbeat outlook for the rest of the year, Mulally urged caution.
“While we are pleased with our momentum, the business environment remains challenging,” he said. “Even as we see positive signs emerging in the global economy, the recovery is fragile.”
Ford shares, which are trading near five-year highs, pulled back following the report, down 3.5 percent at $13.95. The stock has added almost 40 percent so far this year and 173 percent in the past 52 weeks.
“I suspect shares in the auto sector are done rebounding for a while,” said Stephen Spivey, senior industry analyst for Frost & Sullivan. “The problem for Ford may not be the earnings statement so much as the balance sheet.”
He pointed out that Ford is still highly leveraged from its 2006 asset sale, which allowed the company to avoid bankruptcy like rivals General Motors and Chrysler.
As for the bottom line, Ford said it swung to a profit of $2.1 billion, or 50 cents a share, from a loss of $1.4 billion, or 60 cents a share, in the year-ago period.
Excluding one-time items, Ford said profit came in at 46 cents a share.
Revenue rose to $31.6 billion, from $24.4 billion in the year-ago period, driven by Ford’s biggest quarterly market share gain since 1977.
Dearborn, Mich.-based Ford said its performance so far this year is off to a more encouraging start than anticipated and that it now expects to be “solidly profitable” this year with positive automotive operating-related cash flow.
Ford’s U.S. vehicle sales screamed 40 percent higher in March thanks to rising demand for new models like the Fusion and Focus. The month marked the 17th time in the past 18 months that Ford managed to eke out retail market-share gains.