Ford's Profit More Than Doubles on Improved Automotive Profits and Continued Cost Cutting

DEARBORN, Mich. April 21, 2004, John Porretto writng for the AP reported that Ford Motor Co. posted a profit of $1.95 billion in the first quarter, more than double its earnings of a year ago, as improved automotive profits and continued cost cutting lifted results. Its shares rose sharply in early trading.

Results for the January-March period easily surpassed Wall Street forecasts. Ford, the nation's second-largest automaker behind General Motors Corp., also raised its full-year earnings guidance.

Earnings for the period amounted to 94 cents a share, compared with net income of $896 million, or 45 cents a share, in the first quarter of 2003.

Excluding special items, first-quarter earnings were $1.98 billion, or 96 cents a share. That result more than doubled the Wall Street consensus forecast of 44 cents a share.

Revenue in the first quarter rose to $44.7 billion from $40.8 billion in the year-ago period.

"This is the best quarter we've achieved since we began our back-to-basics efforts more than two years ago, and it clearly demonstrates our plan is working and building momentum," said chairman and chief executive Bill Ford. "Our product lineup continues to strengthen with new vehicles such as the Ford Escape hybrid, Ford Mustang and Land Rover LR3/Discovery."

In early trading on the New York Stock Exchange, Ford shares were up $1.14, or 8.4 percent, to $14.70.

Ford's worldwide automotive sector reported a pretax profit of $1.8 billion in the first quarter, an improvement of $1.2 billion from the same period last year.

Ford's financing arm, Ford Motor Credit Co., posted income of $688 million in the period, a quarterly record. That compared to $442 million last year.

The latest quarter marked the first time since 2000 that Ford's automotive business earned more than the company's financial services sector.

Worldwide automotive sales for the quarter rose more than 13 percent to $38.8 billion.

Ford's pretax profit from its North American automotive business was $1.96 billion, up from $1.2 billion a year ago. The increase reflected favorable cost performance, improved vehicle mix and better net pricing.

Ford Europe reported a pretax profit of $5 million, excluding special items, compared with a pretax loss of $247 million during the 2003 period. As in North America, the company experienced better net pricing from a year ago and higher sales. Ford Europe's sales rose to $6.5 billion in the quarter, up from $5 billion a year ago.

In the Asia-Pacific region, Ford reported a pretax profit of $28 million versus a loss of $25 million last year.

Ford's Premier Automotive Group -- which includes the Jaguar, Volvo, Land Rover and Aston Martin brands -- swung to a pretax profit of $20 million from a loss of $88 million a year ago.

Ford reduced costs by $600 million in the quarter -- roughly $100 million more than the goal for the entire year. The company said it was able to lower costs related to recalls, warranty expenses and material.

Special items in the quarter included a $29 million expense for restructuring at Ford Europe and a $17 million gain related to a prior sale.

Ford said it was raising its full-year earnings guidance from a range of $1.20 to $1.30 a share to a range of $1.50 to $1.60 a share from continuing operations, excluding special items. Those items are expected to reduce earnings by about 7 cents a share.

In the second quarter, Ford expects to earn 30 to 35 cents a share, excluding special items.

The current Wall Street forecasts are for full-year earnings of $1.28 a share and second-quarter earnings of 34 cents a share.

Ford Motor Co.: http://www.ford.com/