(Adds stock price, CEO comment)
By Bernie Woodall
DEARBORN, Mich., July 24 Ford Motor Co
reported second-quarter operating earnings that beat
expectations thanks to record profit in North America, boosting
its shares more than 1 percent in early trading.
Pretax profit in North America of $2.44 billion and the
company's first profit in Europe in three years offset
weaker-than-expected results in Asia Pacific and South America.
Chief Financial Officer Bob Shanks said lower costs boosted
the company's performance in North America. Nine analysts
surveyed by Reuters expected a pretax profit of $2.04 billion.
Costs in the second half of the year are expected to rise as
the company introduces more products, including the most
important vehicle in its portfolio, the F-150 pickup truck.
Ford's new chief executive, Mark Fields, said during a
conference call he was "confident" the F-150 would launch on
time without the quality problems sometimes associated with
A limited number of new F-150 trucks, which will be about
700 pounds lighter than the current version, will be available
later this year.
The company's operating margin in North America improved to
11.6 percent, from 10.6 percent a year ago.
Ford affirmed its full-year guidance for a pretax profit of
between $7 billion and $8 billion. Last year, its pretax profit
was $8.6 billion.
The company's outlook for South America was downgraded to a
greater loss than previously expected. It now anticipates
breaking even or taking a loss in the second half of the year.
For the quarter, South America showed a loss of $295
The Asia-Pacific region's operating profit of $159 million
was less than the $260 million expected by analysts. Shanks said
most of that profit came from China, but didn't give a
Ford's market share in China, the world's biggest car
market, rose to a record 4.6 percent.
Profit in Europe "clearly shows that the transformation plan
is working," said Shanks of restructuring efforts that included
closing a Belgian plant.
Ford maintained its outlook for full-year profit in Europe
One-time items in the quarter included an accounting charge
of $329 million because of poor cash flow in Russia, where Ford
has a joint venture with carmaker Sollers.
The quarter was Ford's last one under the leadership of Alan
Mulally, who retired as chief executive and was credited with
Ford's turnaround in his tenure that began in 2006.
Excluding one-time items, Ford earned a profit of $2.6
billion, or 40 cents per share, which topped the
36-cent-per-share forecast by analysts surveyed by Thomson
Net income in the quarter was $1.3 billion, or 32 cents per
share, up from $1.23 billion, or 30 cents, a year earlier.
Revenue of $37.4 billion compared with $37.9 billion a year ago.
Ford shares were up 1.5 percent at $18.06 in morning
trading, after earlier jumping nearly 2 percent.
(Editing by Bernadette Baum)