Ford Posts Profit for First Quarter

Ford Motor Co. on Wednesday posted its second quarterly profit in two years after Chief Executive William Clay Ford Jr. accelerated cost cutting. The company’s shares rose 11%.

First-quarter net income of $896 million, or 45 cents a share, compares with a loss of $1.1 billion, or 61 cents, in the year-earlier period, when the firm wrote down the value of some businesses by $1 billion. Ford had predicted 20 cents a share and analysts expected 22 cents, according Thomson First Call.

The firm spent less on incentives than larger rival General Motors Corp., helping to deliver the first quarterly profit since 2002’s second quarter. Bill Ford last year announced a plan to cut $9 billion in costs to generate $7 billion in annual pretax profit by 2005. He ordered that $1 billion in cost cuts scheduled for later years be moved into 2003.

Ford cut automotive costs by $638 million in the first quarter after absorbing higher pension and health care expenses, exceeding its goal of $500 million for the year. First-quarter revenue rose to $40.9 billion from $39.5 billion.

Shares of Dearborn, Mich.-based Ford rose 88 cents to $9.23 in New York Stock Exchange trading.

Ford said it doesn’t anticipate being able to maintain the first-quarter earnings pace. The company expects earnings of about 10 cents a share for the second quarter and about 55 cents a share in the first half. The full-year target of 70 cents a share was maintained.

More expenses need to be trimmed because “margins are going to continue to be squeezed as the incentive game continues,” said Brian Bruce, director of global investments for PanAgora Asset Management. “Ford is going to have a tough time the rest of the year.”