Ford Motor Co. Wednesday boosted its full-year earnings forecast after posting what the embattled automaker’s executives called its best quarterly earnings in years, led by suprising gains in its automotive operations and strong finance arm results.
The robust performance comes as Ford, which last year booked a full-year profit for the first time since 2000, struggles against cut-throat competition and a declining U.S. market share. The strong report powered Ford shares to a gain of nearly 8 percent in premarket trading.
The second-largest U.S. automaker, led by family scion Bill Ford Jr., is also continuing a massive restructuring program aimed at ensuring annual pretax profits of $7 billion by mid-decade.
“This is the best quarter we have achieved since we began our back-to-basics efforts more than two years ago,” Chairman and Chief Executive Bill Ford said in a statement.
“It clearly demonstrates our plan is working and building momentum,” he said.
Ford said its net earnings more than doubled to $1.95 billion, or 94 cents a share, from $896 million, or 45 cents a share, a year earlier.
Excluding special items Ford, which reduced automotive costs in the quarter by $600 million, said it earned 96 cents a share.
Ford’s previously announced cost cutting target was more than $500 million for all of 2004.
Wall Street analysts on average were expecting first-quarter earnings of 44 cents per share, according to Reuters Research, a division of Reuters Group Plc.
Ford also said it was raising its full-year earnings forecast from a range of $1.20 to $1.30 per share to between $1.50 and $1.60 a share.
On Tuesday archrival General Motors Corp. also reported better-than-expected earnings and raised its profit outlook for the year.
Ford’s market share in the United States fell by 1.2 percentage points in the first quarter and its U.S. sales were off by 1.3 percent. But Ford executives contend that most of those losses stemmed from efforts to focus on profit and make overall sales less dependent on the low-margin fleet and daily rental business.
While Ford’s U.S. vehicle sales were down for the quarter, its revenues rose to $44.69 billion from $40.82 billion in the quarter a year ago.
Ford’s automotive unit had a pretax profit of $1.82 billion, meanwhile compared with $662 million a year ago.
Its financing arm, Ford Credit, reported record net income of $688 million, up from $442 million in the same period a year ago.
The automaker forecast second-quarter earnings of 30 cents to 35 cents a share, excluding any special charges. Analysts on average were expecting 36 cents a share in the second quarter, according to Reuters Research.
Ford’s special items in the first quarter included $29 million charge for restructuring in Europe and a $17 million gain realting to a previously announcement divestiture.
In premarket trading, Ford shares rose to $14.60 from their closing price on Tuesday of $13.56 on the New York Stock Exchange.Ford Motor Co. on Wednesday reported a stronger-than-expected profit for the first quarter, as cost cuts and record results from its finance arm outweighed weaker car sales.
