Ford Surprise: Turns Red Ink into Black
By Michelle Krebs April 24, 2008
DEARBORN, Mich. -- Ford reported Thursday morning that it was in the black in the first quarter, compared with the red ink it reported in the year-ago quarter, thanks to aggressive cost cutting and strong international sales.
Analysts had predicted Ford would announce a loss. Instead, Ford surprised them by posting net income of $100 million in the first quarter this year, compared with a $282 million loss in the year-ago quarter.
Profitability will be short-lived, however. Ford executives said in a conference call with media and analysts that the automaker will post a loss for full-year 2008, albeit vastly improved from 2007. They added the company is still on target to be profitable for 2009.
In its statement, Ford said it made significant progress on its plan âto aggressively restructure to operate profitably, accelerate the development of new products our customers want and value, finance our plan and improve the balance sheet, and work together effectively as one team, leveraging our global assets.â
âThe results of this quarter are encouraging, particularly our outstanding performance in Europe and South America,â said Ford President and CEO Alan Mulally in the company's statement. âIn the past several years, we have substantially restructured these businesses. We believe this is an indication that our efforts to leverage Fordâs global assets across the world will bear fruit."
He added: "Going forward, we remain committed to our key business objectives, including our goal of reaching North America and overall automotive profitability in 2009 despite the challenging economic conditions.â
Ford said its first-quarter cost reductions totaled $1.7 billion, including $1.2 billion in North America. It had strong profitability in Europe and South America. Ford North America improved its performance by nearly $600 million from the first quarter of 2007. Pre-tax profits rose to $736 million, up from $669 million a year ago.
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I think Mazda has a lot to do with this, just look at the Mazda numbers world wide they're rocking with hot, reliable, good looking products, just imagine for the next months with the All New Mazda 6 coming..the battle is gonna be rough.
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