Ford's Revenues Climb, But Commodity Prices Drive Profits Lower

Mulally: The automaker delivered 'solid' results 'despite an uncertain business environment.'

Ford Motor Co. on Wednesday reported solid profits for the third quarter as a higher pricing strategy drove sales higher.

The second-largest U.S. automaker said it had income of $1.65 billion in the July-September period.

Revenue rose 14% for the nation's best-selling brand, to $33.1 billion, the Dearborn, Mich.-based company said.

Ford's profit was 2% lower than the same period in 2010, but exceeded market expectations.

Earnings per share on a pre-tax basis and excluding special items were 46 cents, a penny more than most analysts estimated.

It was the 10th consecutive quarterly profit for Ford, the only major U.S. automaker that did not seek a government bailout during the 2008-2009 financial crisis.

Alan Mulally, Ford's president and chief executive, said the company delivered "solid" results "despite an uncertain business environment."

"We accomplished this while continuing to invest for future growth and focusing on developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value," he said in a news release.

Automotive pre-tax profit was $1.3 billion, an increase of $45 million from the same period a year ago on a higher pricing strategy, the company said.

North America and South America reported pre-tax profits, while Europe and Asia Pacific and Africa posted a loss for the period.

The company said it sold a total 1.3 million vehicles in the third quarter, up 93,000 units from a year ago, with every one of its business segments reporting increases.

Profit gains were partially offset by higher costs, a third of them commodity costs.

Ford said it continued to strengthen its balance sheet in the third quarter, paring debt in its automotive division by $1.3 billion.

"We remain well on track to deliver improved full year pre-tax operating profit and automotive operating-related cash flow, consistent with our guidance," said Lewis Booth, Ford's executive vice president and chief financial officer.

"Our liquidity remains strong, and we will continue to take actions when appropriate to strengthen our balance sheet."

Copyright Agence France-Presse, 2011

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