Thu, Nov 26 2009
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Published November 02, 2009 11:07 am - Ford, the only U.S. automaker to dodge direct government aid and bankruptcy court, surprised investors with net income of nearly $1 billion in the third quarter and forecast a "solidly profitable" 2011. Ford surprises with $1B profit; sees profit in '11 DEARBORN, Michigan (AP) — Ford, the only U.S. automaker to dodge direct government aid and bankruptcy court, surprised investors with net income of nearly $1 billion in the third quarter and forecast a "solidly profitable" 2011.
The automaker said Monday earnings were fueled by U.S. market share gains, cost cuts and the "Cash for Clunkers" program, which drew flocks of buyers to showrooms this summer. Ford's shares rose 68 cents, or 9.8 percent, to $7.68 in morning trading. The latest results signal that Ford's turnaround is on more solid ground. The company lost more than $14.6 billion last year and hasn't posted a full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its interest payments. Ford, based in Dearborn, Michigan, reported third-quarter net income of $997 million, or 29 cents per share. Its profit forecast for 2011 was a step above previous guidance of break-even or better for the year. Ford's key North American car and truck division posted a pretax profit of $357 million, the division's first quarter in the black since early 2005. Ford cited higher pricing, lower material costs and increased market share for the improvement. Excluding one-time items, Ford earned 26 cents per share, blowing away analysts' expectations of a loss of 12 cents. The earnings came despite an $800 million revenue drop. But Ford said it cut costs by $1 billion during the quarter, accomplished through layoffs in North America and Europe, reduced pension and retiree health care costs and improvements in productivity and product development. Chief financial officer Lewis Booth said the company took in $1.3 billion more than it spent in the quarter, an improvement over its $1 billion cash burn in the second quarter. 
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