Ford swings surprise profit

Ford cut its North American production outlook for the second quarter by 20,000 vehicles to 710,000, or about 101,000 lower than a year earlier. It has also said it remains ready to cut production more if demand falls further.

Ford said it would cut truck production in North America by 40,000 and increase car production.

The company also cut its full year forecast for U.S. auto industry light vehicle sales to a range of 15 million to 15.3 million, from 15.7 million, a move executives tipped during a monthly sales conference call in early April.

Given that sales ran at about a 15.2 million seasonally adjusted annual rate in the first quarter, Ford is not banking on a significant rebound in industry sales in the rest of 2008. The outlook is about in line with forecasts from analysts and other carmakers.

Ford said it was expecting second quarter U.S. auto sales to be lower industrywide than the first quarter, followed by a lift in sales in the second half of the year.

"Next quarter when the fiscal and monetary policy starts to kick in, I think we'll know a lot more about the pace of the recovery," Ford Chief Executive Alan Mulally told analysts and reporters on a conference call.

Ford also said its Ford Motor Credit Co reported net income of $24 million in the first quarter, down from $193 million a year earlier, mainly reflecting a higher provision for credit losses, depreciation on leased vehicles and higher net losses related to market valuation adjustments from derivatives.

Ford shares were up $1.24, or 16.49 percent, at $8.76 on the New York Stock Exchange early Thursday afternoon.

(Additional reporting by Ben Klayman; Editing by Gerald E. McCormick, Derek Caney, Toni Reinhold)