Ford Surprises With $750 Million Profit

July 26, 2007
Improved global operations and sale of Aston Martin boosted earnings

Ford Motor Co. stunned analysts July 26 with a surprise second-quarter profit of $750 million, helped by improving global operations and the divestment of its Aston Martin brand. The sale of Aston Martin, the British sportscar maker, brought in $443 million.

Even accounting for special factors, the results were far ahead of Wall Street expectations for the second-largest U.S. auto company to remain in the red after a record $12.7 billion loss in 2006.

Ford's second-quarter revenue was $44.2 billion, up from $41.9 billion a year ago, with a weak dollar and higher pricing offsetting lower volume car sales. Ford noted that it is "exploring in greater detail" the likely sales of its Jaguar and Land Rover nameplates and "is in discussions with selected parties who have expressed interest."

It also acknowledged "a strategic review of Volvo that likely will conclude prior to year-end."

Ford said its cost-savings program trimmed $600 million from expenses in the second quarter and $1.1 billion in the first six months of the year.

Globally, automotive operations accounted for a profit of $378 million in the second quarter. But North America still had a loss of $279 million, down from $789 million in the same period a year ago.

Ford said it got a lift from its new Edge sport utility vehicle, which has become the top seller in its segment.

"We continue to focus on the four priorities of our plan -- restructuring the business to operate profitably, accelerating the development of new products that our customers want and value, funding our plan and improving our balance sheet, and working even more effectively together as one global Ford team, leveraging our assets," said Ford CEO Alan Mulally.

Despite the day's good news, the CEO was quick to put he gains i perspective. These accomplishments are something to be proud of, but we are not ready to declare victory," Mulally said, predicting substantial losses in the third and fourth quarters.

Copyright Agence France-Presse, 2007

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