Ford’s second-quarter profit soars as losses in Europe decline
Powered by brisk sales of profitable pickup trucks, growing business in China and fewer losses in Europe, Ford Motor Co. posted a big gain in profit in the second quarter.
Ford’s profit roses 18.5% to a $1.2 billion. Revenue rose 14.4% to $38.1 billion.
Sales were so good that Ford raised its profit outlook for the entire year. It now expects its annual operating profit to top the $8 billion of a year ago. Previously, the automaker was aiming to match last year’s results.
“We expect 2013 to be another strong year for Ford,” said Alan Mulally, Ford’s chief executive.
Ford’s operating profit in North America rose almost 16% to $2.3 billion.
Underscoring how strong the North American market has been for the automaker, this past quarter marked the fifth out of the last six quarters when the region generated operating income of $2 billion or more and an operating margin of 10% or more.
Sales of pickup trucks, the most profitable vehicles in the Ford lineup, have been strong in the U.S., fueled by a rebound in the housing and construction industries.
Improved sales of passenger cars on the West and East coasts, where Ford is picking up market share from the big import car brands, also contributed to the strong North American financial results.
“Ford has seen their market share increase to 16.5% in the United States, a close to 1-point increase compared to the first six months in 2012,” said Alec Gutierrez, senior analyst at Kelley Blue Book.
The automaker has started to trim its losses in Europe, where car manufacturers have lost billions of dollars in recent years because much of the continent is in recession. Ford said it lost $348 million in the region last quarter, an improvement from the $404-million loss in the same quarter a year earlier.
Ford is in the process of trimming about 6,200 jobs in Europe as it closes assembly plants in Genk, Belgium, next year, and in Southampton, England, as well as a parts operation in Dagenham, England, later this week.
“Europe is making very good progress,” said Bob Shanks, Ford’s chief financial officer. “Matching supply with real demand and focusing more on retail customers will enable us to meet our goal of being profitable in Europe by mid-decade.”
South America also showed improvement. Ford was essentially break-even there a year ago but earned an operating profit of $151 million in the latest quarter.
Helped by sales in the growing Chinese market, Ford posted strong results from its Asia-Pacific-Africa region. The company had an operating profit of $177 million in the region compared to a loss of $66 million in the same quarter a year earlier.
Ford shares rose 36 cents, or 2%, to $17.30 in early trading.
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