Ford Motor Profit up 15%, Beating Forecasts

Ford Motor Co. said earnings rose a more-than-forecast 15% in its first quarter on U.S. sales of its most-profitable sport-utility vehicles and luxury cars.

The world’s second-largest auto maker posted net income of $2.08 billion, or $1.70 a share, up from $1.81 billion, or $1.46, a year earlier. Revenue rose 14% to $42.9 billion.

Ford was forecast to earn $1.58 a share, the average estimate of analysts surveyed by First Call/Thomson Financial.

Most of Ford’s profit came from the U.S., helped by sales of its Explorer sport-utility and the F-Series pickup truck, the best-selling vehicle in the U.S., as well as Jaguar cars. Ford began selling the Sport Trac combined pickup and sport-utility this month. Its Escape small sport-utility reaches showrooms in June, letting Ford take further advantage of truck demand.

The company also benefited from growing demand overall for vehicles in the U.S. amid low unemployment and consumer wealth from stock gains.

The European operations lost $3 million, an improvement from a loss of $10 million a year ago. Its loss in South America also narrowed, to $82 million from $141 million.

The company said Friday that it will pay $10 billion in cash in a dividend, and spin off its Visteon Automotive Systems parts unit through a distribution to Ford shareholders.

Ford Motor Credit Co.’s profit rose 18% to $353 million. Ford’s share of Hertz Corp. earnings was $46 million, a 15% increase.

Costs were even with a year ago, said Chief Financial Officer Henry Wallace. Ford extended warranty coverage last month on 717,689 cars and minivans equipped with a faulty engine, adding $225 million to its warranty costs.

Management wants to reduce costs for all of 2000 by $1 billion from last year, Wallace said.

Visteon Automotive Systems, the unit Ford plans to spin off to shareholders this year, separately reported earnings of $147 million, down 28%. Revenue rose 9% to $5.2 billion.

Dearborn, Mich.-based Ford reported no gains or charges in the most recent quarter. The year-earlier results exclude a gain of $165 million, or 14 cents a share, from the dissolution of AutoEuropa.

Ford shares rose $4.81 to close at $57.06 on the New York Stock Exchange.