Ford Posts Profit, Shocks Wall Street
Ford Motor Co. surprised Wall Street Thursday with second-quarter earnings of $750 million, its first profitable quarter in two years.
The company also confirmed it is exploring the sale of its Jaguar and Land Rover subsidiaries.
The profit of 31 cents per share compares with a net loss of $317 million, or 17 cents per share, in the same quarter of last year.
The company attributed the gains to significant year-over-year improvement in all of its automotive operations, as well as cost cuts due to restructuring and positive special items that totaled $443 million. That includes a $206 million gain related to sale of its Aston Martin unit.
Fifteen analysts polled by Thomson Financial expected the company to lose 35 cents per share excluding special items.
Ford said it is exploring the potential sale of Jaguar and Land Rover based on discussions with parties that have expressed interest in the British units. And the company said it is conducting a strategic review of Volvo "that likely will conclude prior to year end."
Despite the quarterly earnings, the company said it still doesn't expect to post an annual profit until 2009, although it is burning cash at a slower rate than the $17 billion through 2009 that the company had predicted.
Even without the positive special items, the company still made money in the quarter, posting a profit of $258 million, or 13 cents per share. That compares with a loss of $118 million, or 6 cents per share, in the year-ago quarter.
"Our team is very encouraged by the significant progress we are making. We recognize the challenges that lie ahead and remain fully committed to delivering our plan," Chief Executive Officer Alan Mulally said in a statement.
Dearborn-based Ford reported revenue of $44.2 billion for the quarter, a 5.5 percent gain over the $41.6 billion reported in the year-ago period.
Ford said its automotive sector made $378 million for the quarter, compared with a pretax loss of $716 million during the second quarter of last year.
Although its core North American operations showed improvement, they still posted a pretax loss of $279 million. That compares with a pretax loss of $789 million a year ago.