Arab Today, arab today ford exceeds profit expectations
Last Updated : GMT 06:27:32
Arab Today, arab today
Arab Today, arab today

Ford exceeds profit expectations

Arab Today, arab today

Arab Today, arab today Ford exceeds profit expectations

Dearborn - Arabstoday

Ford Motor Co\'s quarterly profit beat Wall Street expectations, helped by higher prices and improved sales in North America. Ford, the only US automaker that did not accept a government bailout, has posted a net profit for eight straight quarters. It had racked up net losses of $30 billion (Dh110.1 billion) from 2006 through 2008 when it cut jobs, sold unprofitable brands and reshaped a line-up laden with large SUVs and pickup trucks. In North America, Ford\'s pre-tax profit for the second quarter rose 0.5 per cent to $1.91 billion. North America was the only region where the company\'s profit improved. In Europe, where Ford\'s performance has been lagging in recent quarters, pre-tax profit was trimmed nearly in half to $176 million. Article continues below Ford shares were up 1.7 per cent at $13.40 in trading before the market opened Tuesday. Chrysler also reported posting a wider second-quarter net loss yesterday after the US automaker repaid $7.6 billion in debt stemming from its 2009 federal bailout. Retains 2011 outlook Ford did not alter its North American production outlook or its 2011 US sales forecast. However, chief financial officer Lewis Booth said the company now expects full-year US industry auto sales to be at the low end of a range of 13 million to 13.5 million vehicles. It had expected 2011 sales at the high end of that range earlier in the year, he said. Ford\'s sales forecast includes medium and heavy trucks, which account for 250,000 to 300,000 in annual sales. Excluding one-time items, Ford\'s quarterly profit fell to 65 cents per share from 68 cents a year ago. Analysts on average expected earnings of 60 cents per share excluding one-time items, according to Thomson Reuters. Revenue rose 13 per cent to $35.5 billion. Net income fell to $2.4 billion in the quarter, or 59 cents per share, from $2.6 billion, or 61 cents per share. \"We delivered very good quarter results while growing the business globally and serving more customers in every region,\" said Ford chief executive Alan Mulally. \"Despite an uncertain business environment, we further strengthened our balance sheet and continued to invest for the future.\" CFO Booth said the company continued to lower its automotive debt, by $2.6 billion in the quarter to $14 billion. \"This wasn\'t the easiest of quarters,\" Booth said. \"We\'ve got through the Japanese tsunami issues very well. We lost some units [vehicle production] in Asia Pacific, but managed to lose a lot less than we expected and we didn\'t really lose any significant units anywhere else in the world. It\'s just evidence that the plan\'s working.\" Ford is striving to return to an investment grade rating by the major ratings agencies. Booth said he could not predict when the company may return to investment grade. Most major agencies have Ford rated two notches below investment grade. Ford was last at investment grade in May 2005. However, Booth said he expected a re-examination by the agencies once labour talks with the United Auto Workers union are completed. Those talks will officially begin on Friday for Ford. The UAW represents about 41,000 Ford auto production workers. Labour costs still high Ford\'s hourly \"all-in\" labour cost per worker is about $58, compared with about $50-$51 per hour for Chrysler and about $57 per hour at GM. The gap between Ford and its Japanese rivals with US plants has narrowed from about $25 to $30 in 2007 to about $5 to $10 now, according to the Center for Automotive Research of Ann Arbor, Michigan. Ford\'s labour costs are higher than Chrysler mainly because it has hired fewer than 100 so-called second-tier workers who make about half the pay of veteran UAW-represented workers, while about 12 per cent of Chrysler\'s 22,800 union auto workers make lesser wage. The Ann Arbor consultant also said that Ford\'s estimated US auto production labour costs are about $5.1 billion annually. Booth said that Ford\'s profit was hampered by higher commodity costs related mainly to higher oil prices. He said prices for plastics, steel, aluminium, cooper and precious metals are all on the rise and affecting profit margins. \"As we continue to see growth in Asia, commodities stay under pressure,\" he said. Auburn Hills (AP) Chrysler retreated to a loss for the second quarter, but only because the expense of shedding its government debt erased what would have been a modest profit. The company, just two years out of bankruptcy protection, maintained that there are healthy signs despite the loss. Its turnaround continues with a revamped line-up of cars and trucks that is drawing more customers to showrooms. Chrysler reported a $370 million (Dh1.3 billion) net loss from April through June, but said it\'s only because of a $551 million one-time accounting charge for refinancing bailout debts to the US and Canadian governments. Without the expense, Chrysler said it would have earned $181 million. \"Refinancing our debt and repaying our government loans six years early reinforces our conviction that we are on the right path,\" CEO Sergio Marchionne said in a statement. Revenue for the quarter jumped 30 per cent to $13.7 billion, as US sales rose more than 20 per cent. Americans bought more Jeep Grand Cherokee SUVs and revamped cars such as the Chrysler Sebring and Dodge Avenger. The models are also getting higher prices.  

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