Make us your home page
Instagram

Ford turns another profit but worries hurt shares

Ford President and CEO Alan Mulally stands beside a new Ford Taurus before speaking at the 2010 International Consumer Electronics Show in January.

AFP/Getty Images

Ford President and CEO Alan Mulally stands beside a new Ford Taurus before speaking at the 2010 International Consumer Electronics Show in January.

DEARBORN, Mich. — Ford Motor Co. earned $2.1 billion in the first quarter as the economic clouds parted and consumers grew confident enough to buy cars again. But the confidence didn't extend to investors, who pushed Ford's shares down Tuesday on concerns that the automaker's recovery isn't sustainable.

The profit of 50 cents per share was its fourth straight positive quarter. It's an about-face from the same period last year, when Ford lost $1.4 billion, or 60 cents per share, at the height of the recession. Ford said it expects to be solidly profitable in 2010, a year earlier than its previous guidance.

But investors worried that the company can't maintain its strong gains in the second half of the year. Ford's first-quarter U.S. market share made its biggest jump in 33 years, for example, and is unlikely to keep growing at that pace. Ford also faces higher prices for steel and other raw materials, rising interest rates and expected weaker European demand.

Ford shares fell 89 cents, or about 6 percent, to close at $13.57.

Ford relied heavily on a $528 million profit from its finance division this quarter, but Ford Credit's revenues are expected to dip later this year because fewer cars were sold during the recession so there will be fewer payments to collect. Ford Credit's annual profit will likely be flat at $2 billion, the company said.

Lewis Booth, Ford chief financial officer, acknowledged that the company's performance might not be duplicated in subsequent quarters. But he predicted Ford will end the year with even stronger full-year earnings than its first-quarter results. "We would not have improved our guidance if we thought this was just a wild quarter," he said.

Ford's first-quarter revenue rose 15 percent to $28.1 billion. Analysts polled by Thomson Reuters had expected $30.5 billion. Booth said revenues would have been higher but the company excluded $3.5 billion in income from Volvo, which it is selling to Chinese automaker Geely Holding Group. That sale will close in the third quarter.

Ford saw $1 billion in gains from vehicle pricing. That's because prices for some models rose, demand for more profitable vehicles like the top-selling F-150 pickup grew, and Ford limited incentive spending.

But it will be hard for Ford to make as much money from its vehicles as commodity costs rise and the company spends more on upcoming product launches.

Where a big chunk came from

Ford saw $1 billion in gains from vehicle pricing. Among the models that saw price increases over 2009 models:

2010 FORD RANGER

+ 8%

2010 FORD FOCUS

+ 5%

2010 FORD MUSTANG

+ 5%

GM upgrades

General Motors will spend $890 million at five factories to upgrade its V-8 engines to make them more fuel efficient. The automaker says the moves will preserve or create roughly 1,600 jobs at factories in Tonawanda, N.Y.; St. Catherines, Ontario; Bay City, Mich.; Bedford, Ind.; and Defiance, Ohio.



Ford turns another profit but worries hurt shares 04/27/10 [Last modified: Tuesday, April 27, 2010 11:25pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. ReliaQuest opens storefront in mock city of JA Biztown

    Economic Development

    TAMPA — ReliaQuest, a Tampa-based cybersecurity company, opened a "storefront" Wednesday at JA Biztown. The storefront is part of a mock city where students learn economic concepts and run businesses. About 20 real-life Tampa Bay companies sponsor storefronts that local students get to run for a day as part of a …

    ReliaQuest, a Tampa-based cybersecurity company, opened a "storefront" Wednesday at JA Biztown, a mock city where students learn to run businesses. | [MALENA CAROLLO, Times]
  2. Love My Dog owner promises to treat dogs like her own

    Business

    SOUTH TAMPA — Lots of folks daydream about quitting their jobs to play with dogs, but shortly after moving to Florida 15 years ago, Natalie Conner actually did it.

    Some happy customers at the grand opening of Love My Dog Pet Resort’s third location in South Tampa on Oct. 14.
  3. Family brings edible cookie dough to Collins Produce stand

    Business

    VALRICO — Like anybody with a sweet tooth, Scott Laviano has been known to sneak behind his wife, Rose, while she bakes cookies and steal one of the dough balls from the baking sheet before it hits the oven.

    Scott, Rose and Scottie Laviano have opened Eddie Bull’s Cookie Dough inside Valrico’s Collins Produce.
  4. Philanthropist Helen DeVos, wife of Orlando Magic owner and mother of Betsy, dies at 90

    Obituaries

    GRAND RAPIDS, Mich. — Helen J. DeVos, a philanthropist from western Michigan known for her support of children's health, Christian education and the arts, has died at age 90, her family said Thursday.

    Orlando Magic owner Rich DeVos, left, waves to fans while watching court side with his wife, Helen, during the first half of an NBA basketball game against the Chicago Bulls in Orlando. The family of Helen DeVos said the philanthropist from western Michigan known for her support of children's health, Christian education and the arts has died. She was 90. Her family said she died Wednesday, Oct. 18, of complications from a stroke following a recent diagnosis of myeloid leukemia. [Associated Press]
  5. Former Jabil executive again found guilty for 2008 double murders

    Criminal

    Patrick Evans, the former Jabil executive charged with the deaths of his wife and her friend, was found guilty by a jury Wednesday night.

    Patrick Evans talks with Allison Miller, one of his three public defenders, before jury selection continues in his trial Wednesday 10/11/2017. Patrick Evans, a former Jabil executive charged with killing his estranged wife and her friend almost ten years ago, was back in court for a second trial after his original death sentence conviction was overturned by the Florida Supreme Court.