Ford to Trim Production Despite Profitable Period
Ford Motor Co. said Wednesday that it earned $1.2 billion in the first quarter, sharply below last year’s results but far ahead of money-losing rival General Motors Corp. Ford said it was cutting North American production and considering the sale of its Hertz Corp. car rental unit as it braces for a difficult year.
Ford, the nation’s second- biggest automaker, said earnings for the January-to-March period amounted to 60 cents a share, compared with $1.95 billion, or 94 cents, a year earlier. As in recent quarters, the company’s finance unit provided the bulk of the profit.
Revenue rose to $45.1 billion from $44.7 billion a year earlier.
The results beat Wall Street’s expectations. Analysts surveyed by Thomson First Call had expected earnings of 39 cents a share. Ford shares rose 6 cents to $9.34 on the New York Stock Exchange.
On Tuesday, GM reported a loss of $1.1 billion for the quarter, or $1.95 a share. Ford Chief Executive Bill Ford declined to comment on GM, other than to say he hoped that investors did not assume that the companies had the same financial outlook.
“Frankly, misery doesn’t love company,” he said. “I would just ask people to look at us through a different lens and draw their own conclusions.”
Nevertheless, Ford Motor is expecting tougher times ahead. The company, based in Dearborn, Mich., said that before special items, its second-quarter earnings could range from break-even to a loss of 15 cents a share. Chief Financial Officer Don Leclair said Ford’s results should improve in the fourth quarter, when the Ford Fusion and Mercury Milan mid-size sedans reach showrooms.
Leclair said the automaker was considering selling Hertz, which it has owned since 1994, in an effort to focus on its core automotive business. Hertz earned $33 million this quarter after losing $7 million a year earlier.
Hertz, which had revenue of $8 billion last year, could sell for $7.5 billion to $10 billion, Burnham Securities analyst David Healy said.
Ford will cut second-quarter production to 905,000 vehicles, 3.7% lower than its previously announced plan to produce 940,000.
Also Wednesday:
* Motorola Inc. said sales of new cellphone products helped boost first-quarter earnings 14%. Net income was $692 million, or 28 cents a share, up from $609 million, or 25 cents, a year earlier. Revenue rose 9.7% to $8.16 billion.
From Associated Press
* ETrade Financial Corp. said first-quarter earnings rose 4% as income from lending rose. Net income was $92 million, or 24 cents a share, compared with $88.5 million, or 23 cents, a year earlier. Revenue rose 5% to $420.3 million.
From Bloomberg News
