Ford profit expected to rise
The results, an increase of $466 million over the first quarter of 2010, far exceeded analysts' expectations of about 50 cents per share and reflect how well Ford's fuel-efficient vehicles and profitable full-size pickups continue to resonate with consumers who are paying, on average, higher prices than a year ago.
The increase is due in part to lower incentives, and because buyers are choosing more expensive trim levels and options, such as heated seats in a subcompact Ford Fiesta, said Chief Executive Alan Mulally.
Operating profit of $2.8 billion was the strongest for a first-quarter since 2004 and $2.1 billion of that was from automotive operations as consumers continue to embrace the automaker's vehicles, which include new and fuel efficient models. Total revenue was $33.1 billion, up $5 billion from the same period in 2010.
"Our team delivered a great quarter, with solid growth and improvements in all regions," Mulally said.
North American operations saw a pre-tax operating profit of $1.8 billion, which is up $591 million from a year ago.
04/25/11 Ford Motor Co., the second-largest U.S.-based automaker, is scheduled to report first-quarter results before the market opens on Tuesday.
Ford had a very successful 2010, earning $6.6 billion, more than double what it made in 2009 and its largest profit since 1999. The company also cut the staggering debt it amassed to stay in business and avoid bankruptcy protection during the recession. Last year, debt was slashed to $14.5 billion from $33.6 billion. Interest payments fell by more than $1 billion, which should help earnings this year.
CEO Alan Mulally remains upbeat about 2011 and expects profits and cash flow to improve. Debt reduction also will continue. Ford could also benefit from shortages of models at Toyota dealers and other Japan-based automakers due to the March 11 earthquake.
Ford, like other automakers, faces higher oil and steel costs, and that could affect earnings. The company raised prices by an average of $117 per vehicle at the end of the first quarter to offset some of the cost increases.