Ford earns $2.1 billion profit in first quarter
 

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Ford Motor Co. said Tuesday it earned $2.1 billion US in the first quarter, another sign the economy is improving as people spend more on big-ticket items like cars.

The automaker expects to be solidly profitable this year, a year earlier than its previous guidance.

Ford said its net income per share was 50 cents for the quarter. That's an about-face from the same period last year when it lost $1.4 billion, or 60 cents per share, at the height of the recession.

It was Ford's fourth straight positive quarter and its most profitable in six years.

Ford, the only big Detroit-area automaker to shun government aid and stay out of bankruptcy protection last year, gained market share from crosstown rivals General Motors Co. and Chrysler Group LLC. It also benefited from Toyota Motor Corp.'s safety recalls of millions of vehicles.

Ford was one of the top brands considered by Toyota owners who were shopping for a new car, Kelley Blue Book said.

In a sign of its confidence in the economic recovery, Ford said it's boosting North American production in the second quarter to 625,000 vehicles, a nine per cent increase over first-quarter levels.

The increase could mean additional hiring by Ford, but chief financial officer Lewis Booth said Tuesday it's too early to say if the company will add workers.

"If we continue to grow, maybe we'll talk about that sometime later," Booth said. "It's not running ahead of our expectations, but it is coming along roughly with our expectations," Booth said.

Ford's first-quarter revenue rose 15 per cent to $28.1 billion.

Ford reported a one-time gain of $188 million from the sale of its Volvo brand to China's Geely Holding Group, which was completed at the end of March. That was offset by a $63-million loss from personnel reductions and dealer payments.

Ford is no longer including Volvo in its results, but said the unit would have recorded a $49-million profit for the quarter.

Excluding one-time items, Ford reported a pretax operating profit of 46 cents a share.

Ford's U.S. sales climbed 37 per cent for the quarter and its market share rose nearly three percentage points. The company made $1.2 billion in North America, which had been draining cash in prior years.

Booth said the company's quarterly performance might not be duplicated later in the year.

He said Ford's credit unit had a particularly strong performance, with a net profit of $528 million and he also expects increased commodity prices and expenses for launching new vehicles later this year. But he said Ford would be more profitable for the year than it was at the end of the first quarter.

Booth said Ford's sale price per vehicle was flat between the fourth quarter and the first quarter, despite big incentives offered in the first quarter by Toyota. He expects Ford to see pricing gains in the remainder of the year.

Ford has gradually cut costs and improved sales since the depths of the recession a year ago. Ford made $2.7 billion last year but the company remains saddled with significant debt.

Ford said its debt increased by $700 million to $34.3 billion in the quarter.

Booth said the company will continue to work on lowering its debt load. Ford paid off $3 billion in debt at the beginning of this month.

In Canada, Ford operates assembly plants in Oakville, Ont., and St. Thomas, but it plans to shut down the latter southwestern Ontario factory next year. The company also has parts plants in Windsor and other communities.

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not to shabby considering where the american auto industry was 1 year ago. thanks Toyota for failing so much.

I always thought Ford was the most stable of all US manufacturers. I more curious to see how GM did.

nothing to do with toyota. Ford's cars have come a long way since the awfully bad Taurus back in the days.

Step up to a Ford today and even if you don't like it you'd imagine there's a good market for it.

I bet most people who own late Volvo's & Mazdas don't even realise they're essentially driving Fords.

My MS3 has FoMoCo stamped all over the place.

better than chrysler and GM i suppose

Uh, didn't GM just repay billions in loans, far ahead of schedule?

However, they are still 34.4 billion in debt.. vs GM 17billion on the books since they are in Chapter 11. Considering automotive industry runs in average 8 year model cycles.. It is hard to see Ford doing well on the long run (It is highly unlikely they will have have the same profit numbers every quarter for the next few years). Just servicing the debt will wipe out their profits.

Reference:

Did Ford escape bankruptcy only to get buried by debt?

Posted By Drew Johnson On April28 @ 1:05 pm In Ford News | 16 Comments

The $23.5 billion loan Ford received in 2006 that kept the Michigan automaker out of bankruptcy court – unlike cross-town rivals General Motors and Chrysler — but the resulting debt could be threatening the company’s turnaround plan.

Ford may have posted a $2.1 billion profit during the first quarter, but the Blue Oval is still fighting a mountain of debt. Helped along by that 2006 loan, Ford now has $34.3 billion in debt – well above the $17 billion debt GM carried as it exited bankruptcy last year.

Although Ford has established a good head of steam during the early part of 2010, the automaker’s debt load could slow the company’s momentum in the coming years. Ford paid $1.5 billion in debt interest last year, taking away funding from its future vehicle projects.

Ford’s turnaround plan hasn’t jumped off the track yet, but investors have become wary of the company’s debt load and pending turmoil in the European market. Ford’s stock hit a five-year high last week, but has stumbled over the last two days. “The business environment remains challenging,” Ford CEO Alan Mulally said. “But we are committed to remain absolutely focused on our business plan.”

Mulally added that investors should temper expectations as the company likely won’t repeat its first quarter results throughout the year.

References
1. ‘Ford’s hurdle now…’ view

Article printed from Leftlane – news, reviews, and info for the auto-industry: http://www.leftlanenews.com

URL to article: http://www.leftlanenews.com/did-ford...d-by-debt.html

My understanding is that GM didn't actually repay the loans, they simply moved money around to make it look like they did, so they can start to rebuild consumer confidence.

Yep:

GM repays federal loan with government money


You'd think that General Motors Co., having been rescued by U.S. taxpayers, would be more up-front with them.

In an ad that has been blanketing the airwaves since last week, General Motors Chairman and chief executive Ed Whitacre boasts that "we have repaid our government loan, in full, with interest, five years ahead of the original schedule."

In a press release, Whitacre said GM was able to repay the loans "because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse."

Neither the ad nor the press release mentioned that GM repaid its government loan with other government money, or that U.S. taxpayers could lose money on the roughly $50 billion they still have invested in General Motors.

In a letter to Treasury Secretary Timothy Geithner last week, Sen. Chuck Grassley, R-Iowa, said the repayment "appears to be nothing more than an elaborate TARP money shuffle."

Treasury spokeswoman Meg Reilly says Geithner hopes to respond to Grassley's letter, perhaps by today. General Motors did not respond to calls for comment.

How did taxpayers get into this situation?

Before and during its bankruptcy, the U.S. Treasury loaned General Motors $49.5 billion from the Troubled Assets Relief Program.

When GM emerged from bankruptcy as a new company in July, the Treasury converted most of those loans into a 60.8 percent stake in the new company's common stock, $2.1 billion in preferred stock and $7.1 billion in loans. About $400 million in loans was repaid almost immediately, leaving GM with about $6.7 billion in government debt. The balance of the loan was originally due July 2015, but the date was later accelerated to June 30, 2010.

GM had already repaid $2 billion in loans. Last week, it announced it had repaid the remaining $4.7 billion.

The automaker, however, didn't repay any of the loans from its earnings. Repayments came from "other TARP funds currently held in an escrow account," according to a report by the special inspector general overseeing TARP funds.


http://www.sfgate.com/cgi-bin/articl...BUS91D55HR.DTL

if ford brings the focus rs here, I'm pretty sure they'd make double that

That is true, my friend who is a body tech took apart a Mazda 3 one day and told me it said FoMoCo on many parts.

He then said it was Ford's way to sound "japanese-y" by stamping FoMoCo instead of Ford Motor Company. LOL.

They've been using FoMoCo for a loooooooooong time.

Well... technically they did repay the government... it's just that they used money that was invested by the government as part of its equity stake in GM. That money belonged to GM and was not borrowed. The fact that it didn't come from earnings is really moot. GM had cash and its management deemed that it would make more business sense to repay the government loan than to invest that money into the company (read: they couldn't perceive generating a return from that capital greater than the cost of the government debt). In the end, tax payers were paid what they owed and they still own a large chunk in GM.

Ford is definitely stepping up :thumbsup:

fords always been a pretty sound company

with the deals and the "deals" they were offering it was no surprise they would do well

probably made a deal with some dai loh's to use their durable ford trucks to transport "Goods"

cough*Geely*cough

Give the freakin guy a break won't ya? At least the founding father had a library, yo.
A weak one at that.
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ENRON

i love the look of the new Fusion.

plus all the interiors have greatly improved since 2006

good job ford....your building really good quality cars in all your lines....id contemplate owning a ford these days

They're reporting a 188 million dollar gain for selling volvo - that they sold for 1.8 billion?
Wat? Decimal place error?

That's a big difference as it would mean basically they broke even but they sold Volvo.

Either way Ford is kicking ass, but the number seem wrong somewhere...

this is coming from a previous ford hater... ford is making some really nice shit right now, i give them props.