26
Jul
07

Ford Motor Posts $750 Million Profit After 7 Quarterly Losses

Bloomberg 07/26/07 by Bill Koenig
July 26 (Bloomberg) — Ford Motor Co., the second-biggest U.S. automaker, reported a surprise second-quarter profit of $750 million on cost cutting and gains related to the sale of Aston Martin. The results snapped a streak of seven consecutive quarterly losses.

Net income was 31 cents a share, compared with a loss of $317 million, or 17 cents, a year earlier. Sales rose 5.5 percent to $44.2 billion, the Dearborn, Michigan-based company said in a statement today. Ford said it’s studying a possible sale of its U.K-based Jaguar and Land Rover luxury-vehicle units and conducting a “strategic review” of its Volvo brand.

To earn the profit, Ford had to overcome falling sales of pickups and truck-based sport-utility vehicle. The company’s new car models and so-called crossover SUVs haven’t been able to pick up the slack. Ford’s U.S. vehicle sales tumbled 9.3 percent in the quarter, led by declines for F-Series pickups and Explorer SUVs.

The profit is the first under Chief Executive Officer Alan Mulally. He is closing 16 of 41 North American plants by 2012, including nine by next year. Mulally, recruited last year from Boeing Co., where he headed commercial-aircraft operations, is trying to reduce costs to match Ford’s smaller share of the U.S. market.

The company had a record loss of $12.6 billion in 2006 and has projected it won’t be profitable on an annual basis until 2009, mainly because of its North American automotive operations.

Excluding what the company considers one-time costs and gains, the second-quarter profit was $258 million, or 13 cents a share. On that basis, Ford was expected to report a loss of 34 cents a share, the average estimate of 13 analysts surveyed by Bloomberg.

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