Ford Motor Co. on Wednesday said its third-quarter profit rose 62%, beating estimates and setting a record for the period, in a performance analysts say the auto maker may be hard-pressed to repeat amid an onslaught of competition for its popular sport-utility vehicles.
The world's second-largest auto maker said net income rose to $1.13 billion, or 90 cents a fully diluted share, from $694 million, or 53 cents, before special items in the year-earlier period. Ford was expected to earn 84 cents a share, according to analysts' estimates.
Ford's increase was fueled in part by strong U.S. demand for its high-profit Expeditions and Navigators, new full-sized sport-utility vehicles the company can't produce enough of. But with competitors set to introduce a wave of similar vehicles, Ford's profit growth could slow considerably, analysts said.
"The third quarter was great for Ford, but one should be skeptical about the sustainability of these results going forward," said Gary Lapidus, a Sanford C. Bernstein & Co. analyst.
Investors, who have boosted Ford shares more than 50% this year, seemed to share those reservations, as the company's shares dropped 44 cents to close at $49.13 on the New York Stock Exchange.
Ford said its per-share earnings in the latest quarter were reduced nine cents a share by the costs of closing plants in Lorain, Ohio, and Windsor, Ontario. It didn't treat these costs as special charges. Also, Ford set aside more money to pay for the depreciated value of vehicles its customers are now leasing.
"They took the opportunity of a good quarter to take some discretionary write-offs, as a hedge against things being a little tougher going forward," said David Healy, a Burnham Securities analyst.
After a charge for early-retirement costs and a gain from the sale of its USL Capital unit, Ford's year-earlier net income was $686 million, or 56 cents a share.
Third-quarter revenue rose to $36.1 billion from $34 billion.
Ford's third-quarter results were boosted by booming sales in Latin America and narrower losses in Europe, where the company has cut costs to cope with a glut of vehicles, a threat now looming in the U.S. light-truck market, analysts say.
During the next several months, Toyota Motor Co., Chrysler Corp. and the Mercedes-Benz unit of Daimler-Benz will all starting selling new sport utilities and pickups in the U.S.
