DEARBORN, Mich. — The Ford Motor Company on Friday said it earned $2.6 billion in the second quarter and expected to have more cash than debt by the end of 2011. þþIt was the fifth consecutive quarterly profit and best earnings report in more than six years for Ford, whose turnaround has been picking up steam, increasing sales and market share in the United States, even as the market remains sluggish. þþ“They have been making all the right moves. It’s been impressive,” Rebecca Lindland, an analyst with the research firm IHS Automotive, said. “They just have an unbelievable amount of momentum right now.” þþFord, the only Detroit automaker not to file for bankruptcy protection or receive emergency federal aid, said it expected to be profitable in the second half of this year and deliver even stronger results in 2011. It said, however, that second-half profit in 2010 would be less than the $4.7 billion it earned in the first six months because of seasonal changes in demand and new product introductions. þþExcluding special items, Ford earned $2.9 billion before taxes, or 68 cents a share. A year ago on that basis, the company lost $554 million, or 21 cents per share. þþRevenue was $31.1 billion, up 17 percent from the comparable period a year ago. þþFord earned $2.1 billion from its automotive operations, including $1.9 billion in North America, compared with losses a year ago. All other regions also were profitable þþ“We are ahead of where we thought we’d be after this excellent first half,” Ford’s chief executive, Alan R. Mulally, said on a conference call. “The driving forces behind our progress include our new products and our leaner global structure.” þþThe automaker’s financing arm, Ford Motor Credit Company, earned $888 million. Executives said Ford Credit is not expected to perform as well in the second half but that it would finish the year more profitable than 2009. þþFord reported positive cash flow of $2.6 billion in the second quarter, leaving a total of $21.9 billion in reserves as of June 30. In 2008, Ford was burning through nearly $2 billion of its cash every month. þþBut the company ended the quarter with $27.3 billion in debt, even after paying down $7 billion. Executives said Ford would move into a net cash position by the end of next year. þþExecutives said Ford would move into a net cash position by the end of next year but declined to reveal specific plans to pay down more debt. þþFord carries considerably more debt than its cross-town rivals, which were able to wipe out much of their obligations through the bankruptcy process. þþ“The size of their debt is the biggest negative but they’re not ignoring it. They’re not putting their head in the sand,” Ms. Lindland, the IHS Automotive analyst, said. “If they can make these kinds of profits in this very conservative environment, just wait till this place really starts recovering and the global market starts recovering.” þþFord’s sales in the United States rose 28 percent in the first half of 2010, nearly double the industry average. Its market share rose to 16.9 percent, from 16.4 percent a year earlier. þþSales across the industry have slowed in recent months, though, raising concerns about the economic recovery. þþFord now expects all automakers to sell between 11.5 million and 12 million vehicles in the United States this year, its chief financial officer, Lewis W. K. Booth, told reporters. Previously, Ford had expected industrywide sales to be as high as 12.5 million. In the first half, automakers were on pace for about 11.4 million sales in the United States. (Before the recession, new vehicle sales in the United States topped 17 million a year for most of the last decade.) þþBut Ford does not believe the economy is stalling. þþ“It’s a slow recovery, but we think it’s sustainable,” Mr. Booth said. þþMr. Booth said Ford expects to spend about $1 billion more on steel and other raw materials this year than in 2009 because of rising prices. Structural costs also are expected to be about $1 billion higher, reflecting increased production and greater spending on vehicle engineering and development, he said. þþThe company recently began selling its new subcompact car, the Ford Fiesta, and has several important model introductions on the horizon, including the Ford Explorer crossover vehicle and the Ford Focus compact car. þþShares of Ford were up 3 percent to $12.49 in morning trading on the New York Stock Exchange. þ
Source: NY Times
