Greener cars and a bounce-back in the global economy helped Ford report its largest first-quarter profit in 13 years.
The company reported a net income of $2,6bn, or 61cents a share, compared with $2,09bn, or 50cents a share, during the same period a year earlier. Revenue rose to $33,1bn, up from from $28,1bn in 2010. Excluding special items, Ford has posted operating profits for seven consecutive quarters.
Ford’s largest first-quarter profit since 1998 was driven in part by the return of United States consumers to car dealerships. The company said buyers were favouring smaller, greener cars to cope with rising petrol prices. This week unleaded petrol averaged $3,87 a gallon in the US, up from $2,85 a year ago.
Despite the trend to smaller cars, the average sales price rose. US consumers paid an average of $31 508 for Ford models in the first quarter, up 3,9% from $30 319 last year, according to car analyst Edmunds.com.
The improvements spanned Ford’s global business. In Europe, first-quarter pre-tax operating profits more than doubled to $293m, compared with a profit of $107m a year ago. Ford South America’s pre-tax operating profit rose to $210m from $203m a year ago and in Asia Pacific Africa, profits were up to $33m from $23m.
Ford said it expected to build 1,5-million vehicles worldwide in the second quarter, 12 000 more than a year ago.
Alan Mulally, Ford president and chief executive, said: “Our team delivered a great quarter, with solid growth and improvements in all regions. We continue to accelerate our ‘One Ford’ plan around the world, delivering on our commitments to serve our global customers with a full family of best-in-class vehicles and deliver profitable growth for all, despite uncertain economic conditions.”
Ford cut its debt by $2,5bn in the first quarter and said its cash reserves now exceed its debt by $4,7bn. It reported $2,2bn of positive cash flow for the quarter, compared with a $100m outflow a year earlier.
Jessica Caldwell, senior analyst at Edmunds.com, said: “Ford’s momentum stems from the company’s balanced product portfolio and its commitment to refresh its line-up at an aggressive pace, which keeps dealers excited and continues the buzz among car-shoppers.” She said that Ford was now well represented in in every major product category. “The challenge for Ford will be maintaining this momentum – there’s more pressure when you’re the one to watch,” she said. — guardian.co.uk