24 April 2008

Ford's share price bounced reassuringly after the group reported a first quarter pretax profit of $100 million. While North America appears still to be a source of some weakness for the group, it made substantial profits in Europe and Latin America.

 

The net income of $100 million is a $382 million turnaround from the loss sustained in the first quarter of 2007, but comparisons between the figures across the two years are difficult because of the disposals that Ford has made in the past 12 months.

 

The first quarter 2008 results for instance do not include Jaguar and Land Rover, which were in the process of being sold to Tata Motor of India. Aston Martin too has gone from the 2007 accounts.

 

But Ford chiefs were upbeat about the degree of recovery that a first quarter profit represented, and stockmarkets agreed with them.

 

President and CEO Alan Mulally said: "The results of this quarter are encouraging, particularly our outstanding performance in Europe and South America. In the past several years, we have substantiallty restructured these businesses. We believe this is an indication that our efforts to leverage Ford's global assets across the world will bear fruit."

 

Mulally said that the group was "committed" to achieving key business objectives, including the goal of profitability for North America and its overall automotive activities for 2009.

 

Ford Europe made profits of $739 million and Ford South America $257 million in the first quarter. North American automotive operations returned a loss of $45 million pretax, much improved over the $613 million it lost in the first quarter of 2007.

 

The black spot for Ford was Volvo, which fell to a pretax loss of $151 million againstb profits of $94 million a year ago. Ford blamed unfavourable volumes and mix.

 

In all its automotive activities, Ford made a pretax profit of $669 million, against a pretax loss of $226 million this time last year. Ford put the change down to a favourable cost balance of $1.7 billion in the quarter, which was offset to some degree by unfavourable volume and mix and by currency losses.