Ford's profit for 1st quarter rises to highest in 13 years

4/27/2011

DEARBORN, Mich. -- Ford Motor Co. posted its best first-quarter profit in 13 years, as its new, more fuel-efficient vehicles reached showrooms during a surge in gasoline prices.

Ford said Tuesday its profit rose 22 percent to $2.6 billion, or 62 cents a share, from $2.1 billion, or 50 cents a share, a year earlier. The quarterly results were the company's best since 1998's $17.6 billion, which included a $16 billion gain from the spinoff of the First Associates Capital Corp. consumer finance unit.

The quarterly profit was the company's eighth straight in its climb back from near-bankruptcy five years ago. Its quarterly revenues rose 18 percent to $33.1 billion; analysts had projected $30.5 billion.

The company had especially strong growth in Asia, where revenues jumped 31 percent to $2.1 billion.

Ford's profit per vehicle in its home market rose more than 30 percent from last year to more than $2,700.

The average price of a Ford vehicle increased $260 to $30,463 in the first quarter, according to Edmunds.com.

U.S. sales more than doubled for the new Explorer sport utility vehicle. Sales of the Fusion midsize sedan rose 27 percent.

Ford's U.S. sales rose 16 percent in the first quarter, excluding Volvo, a brand it has sold since last year, and it outsold General Motors Co. last month for the second time in 13 years.

Ford's shares, which had slumped 15 percent since late January, closed up 0.8 percent at $15.66 in trading on the New York Stock Exchange Tuesday. The stock has gained almost 10-fold from early 2009

Ford Chief Financial Officer Lewis Booth said the company continued to make progress paying off its debt. The company, which took out a $23 billion loan in 2006 to revamp its operations, ended the quarter with $16.6 billion in debt. That debt level was down $2.5 billion from the beginning of the year. Ford now has $4.7 billion more cash than debt.

Ford has more debt than rivals because it borrowed $23 billion in late 2006 before credit markets froze, allowing it to avoid the bailouts and bankruptcies that befell the predecessors of GM and Chrysler Group LLC in 2009.

While buyers seeking smaller, more fuel-efficient vehicles because of higher gas prices could cut into Ford's profits as the year goes on, the company so far has been able to command higher prices for its cars, partly because buyers are adding more expensive options such as the Sync entertainment system.

Ford still has some trouble spots on the horizon. Rising prices for commodities such as steel cost the company $300 million in the first quarter, and could increase its costs by as much as $2 billion by the end of this year.

U.S. sales of the Lincoln luxury brand fell 11 percent in the first quarter. By comparison, sales of GM's Cadillac, a rival to Lincoln, rose 38 percent.

Ford's U.S. market share in the quarter fell to 16.2 percent from 16.8 percent, according to Autodata Corp.