Ford reports 13% rise in profit in 2nd quarter
Bolstered by strong sales of new car models such as the Fusion and redesigned Taurus, Ford Motor Co. said Friday that its second-quarter profit rose 13% to $2.6 billion.
The results — Ford’s best in six years — beat Wall Street expectations and marked the automaker’s fifth consecutive profitable quarter.
Sales climbed to $31.3 billion from $27.2 billion a year earlier.
Buyers have been attracted to Ford’s lineup of fuel-efficient cars and new high-tech features such as Sync, an in-car communications and entertainment system developed by Ford and Microsoft Corp., analysts said.
The Dearborn, Mich., company said it produced 344,000 more autos in the quarter than a year earlier. In all, Ford said it made 1.4million vehicles in the quarter.
“Overall, our performance this year gives us great confidence going forward,” Ford Chief Executive Alan Mulally said in a conference call. “We are ahead of where we thought we’d be.”
With improving profits, the company said it was on track to have more cash than debt by the end of next year.
Ford, which did not file for bankruptcy protection or receive a federal bailout like rivals General Motors and Chrysler, has been saddled with huge debt. It ended the quarter with $27.3 billion of debt even after it paid down $7billion.
Paying down the debt has become a priority, said Shelly Lombard, an analyst at Gimme Credit, a corporate credit research firm.
“It’s a big thing,” she said. “It can give the company more flexibility and ultimately improve the way they’re perceived on Wall Street.”
On the other hand, not taking government money may have worked in the company’s favor, said Michelle Krebs, senior analyst for the auto website Edmunds.com.
“Ford got an image boost among consumers by not taking a bailout,” she said. “Many skeptics thought the debt would overwhelm them. But their vehicles are selling quite well.”
Ford ended the quarter with 17.2% of the U.S. market. That’s up from 16.9% at the end of the first quarter, according to Edmunds.com.
Earnings of 68 cents a share beat analyst expectations of 41 cents.
Ford shares rose 63 cents, or 5.2%, to $12.72.