Ford Profit More Than Doubles
Ford Motor Co. said Wednesday that first-quarter net income more than doubled to its highest level in four years, helped by cost cuts and record earnings from car loans. The second-largest U.S. automaker boosted its 2004 forecast.
Net income rose to $1.95 billion, or 94 cents a share, from $896 million, or 45 cents, a year earlier. Sales increased 9.5% to $44.7 billion. Earnings were more than twice what analysts forecast, and Ford shares climbed as much as 12%.
Pretax automotive profit almost tripled to $1.82 billion as Chief Executive William Clay Ford Jr.’s cost-reduction plan trimmed $600 million, more than the full-year target of $500 million. Ford benefited in the U.S. from a 14% gain in sales of F-Series pickup trucks, among its most profitable vehicles. The credit unit’s profit rose 56%.
The Dearborn, Mich.-based company’s shares rose $1.38, or 10%, to $14.94 on the New York Stock Exchange after hitting an intraday high of $15.13.
Profit excluding some costs was 96 cents a share, handily beating analyst estimates of 44 cents in a Thomson Financial survey.
Bill Ford is cutting jobs, closing plants and introducing models such as the Five Hundred sedan and redesigned Mustang sports car.
“Our plan is working and we’re gaining momentum,” the chief executive said. The company raised its 2004 forecast to $1.50 to $1.60 a share, excluding some costs, from $1.20 to $1.30. It forecast second-quarter profit of 30 cents to 35 cents.
Ford boosted profit even as its U.S. sales fell 1.5% in the quarter, compared with an industry rise of 4%, according to Autodata Corp. The company’s U.S. market share dropped to 20.4% from 21.6% a year earlier, as Asian makers such as Toyota Motor Corp. gained.
Larger U.S. rival General Motors Corp., the world’s biggest automaker by sales, Tuesday reported quarterly net income of $1.28 billion, more than analysts forecast.
Ford’s spending of $4,258 per vehicle on incentives in the quarter was less than General Motors’ $4,388 and the $4,301 by DaimlerChrysler’s Chrysler unit, said CNW Marketing Research in Bandon, Ore.
