Ford Profit Is $1.5 Billion in 1st Quarter
Despite tougher competition, Ford Motor Co. more than doubled its first-quarter profit to $1.5 billion, due largely to aggressive cost cutting.
Ford reported Wednesday its strongest earnings gains were in the United States, even though sales of its cars and light-duty trucks were down slightly in the January-March period.
The No. 2 auto maker’s first-quarter profit of $1.5 billion, or $1.22 per share, compared with $653 million, or 54 cents a share, a year ago. Revenue was up just 3% at $36.2 billion from $35.2 billion.
The results far exceeded Wall Street’s expectations. The average estimate of 15 analysts surveyed by First Call Corp. was 87 cents a share. Ford stock rose $1.625 to close at $34.875 on the New York Stock Exchange.
“We’re off to a good start,” said John M. Devine, Ford’s chief financial officer. “But this is only the first quarter in a tough market.”
Ford’s report capped a strong first quarter for the Big Three. General Motors Corp. said earlier it earned nearly $1.8 billion, up 76%, and Chrysler Corp.’s profit increased 2% to $1.03 billion.
U.S. auto makers are facing tough price competition in Europe and from Japanese auto makers in the United States. .
Still, Ford’s automotive operations earned $1 billion, a sevenfold increase from the $142 million generated in the company’s weak first quarter of 1996. Its U.S. automotive profits were $836 million, compared with just $48 million a year ago, when it was hurt by the costs of launching new models.
Ford credited its performance to strong sales of higher-profit trucks in the United States, the popularity of its new Ka subcompact in Europe and $800 million in savings from cost cutting worldwide.
At a Glance:
American Airlines’ parent AMR Corp. reported 3% lower first-quarter profit, which still topped Wall Street expectations, and cited a labor dispute with pilots at the nation’s No. 2 airline. AMR posted quarterly net income of $152 million, or $1.65 per share, compared with $157 million, or $2.02 per share, in the 1996 quarter.
The results included a $20-million pretax charge for stock options awarded to pilots as part of a tentative labor pact reached two weeks ago after months of negotiations. The results handily beat Wall Street expectations of $1.47 per share.
Los Angeles-based Northrop Grumman Corp.’s first-quarter earnings rose 23% to $75 million, or $1.30 a share, from $61 million, or $1.23, in the year-earlier quarter, beating expectations by a penny.
General Dynamics reported a 9% increase in first-quarter earnings, posting net income of $71 million, or $1.13 per share, up from $65 million, or $1.03, in the year-ago quarter.
Merck & Co. said first-quarter earnings rose 18% to $1.02 billion, or 84 cents a share, up from $863.8 million, or 70 cents, a year earlier.
Fleet Financial Group Inc. reported an 18% increase in first-quarter profit, earning $311 million, or $1.10, compared with $264 million, or $0.94 per share a year earlier.
Republic Bancorp Inc. said first-quarter earnings rose to $3.96 million, or 23 cents a share, from $2.63 million, or 14 cents, a year ago.
Wachovia Corp. said first-quarter earnings rose 8.8% to $163.1 million, or 99 cents a share, from $149.9 million, or 87 cents, in the same quarter last year.
Charles Schwab Corp. said first-quarter earnings rose 42% to $66.7 million, or 37 cents a share, from $46.9 million, or 26 cents, a year earlier.
Colgate-Palmolive Co.’s first-quarter earnings rose a better-than-expected 18% to $169.6 million, or $1.12 a share, from $143.5 million, or 95 cents, a year ago.
Clorox Co. said its fiscal third-quarter earnings rose a better-than-expected 10% to $65.6 million, or $1.27 a share, from $59.6 million, or $1.15, a year earlier.
Rubbermaid Inc. said first-quarter earnings fell 18% to $34 million, or 23 cents a share, from $41.7 million, or 27 cents, in the year-earlier quarter.
Callaway Golf Co. reported first-quarter net income of $24.4 million, or 34 cents per share, compared with $19.5 million, or 28 cents, a year ago.
Whirlpool Corp. said its first-quarter earnings jumped 21% to $46 million, or 62 cents a share, compared with $38 million, or 50 cents, in the same period last year.
Conrail Inc. reported first-quarter earnings of $61 million, or 74 cents per share, compared with $31 million, or 36 cents, a year ago.
Polaroid Corp. first-quarter profit before a gain was $5.9 million, or 13 cents a share, compared with a year-earlier loss excluding a charge of $3.1 million, or 7 cents.
Mead Corp. said first-quarter earnings fell 35% to $20.2 million, or 38 cents a share, from $30.9 million, or 58 cents, before a gain, in the year-ago quarter.
