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North America powers big Ford Motor Co. first-quarter profit

April 24, 2013|By Jerry Hirsch
  • Ford Motor Co. President and chief executive Alan Mulally stands beside a new Lincoln MKZ sedan at a media launch in front of New York's Avery Fisher Hall, Lincoln Center Plaza.
Ford Motor Co. President and chief executive Alan Mulally stands beside… (Spencer Platt / Getty Images )

Ford Motor Co.’s first-quarter profit rose more than 15%, helped by record earnings in North America and strong performance by its auto loan financing arm.

Ford’s net income was $1.6 billion, or 40 cents per share, compared to $1.4 billion, or 35 cents a share, in the same period a year earlier.

Revenue rose 10% to $35.8 billion.

“We continue to expect 2013 to be another strong year as we go further in strengthening our global product lineup and improving the competitiveness of our operations,” said Alan Mulally, Ford’s chief executive.

The automaker posted a record North American operating profit of $2.4 billion, the highest since Ford started reporting separate results for the region in 2000. Its profit margin on sales in the region was 11%, down slightly from a year earlier as the company invested in new products and paid more in pension obligations.

“North America experienced very strong growth in the first quarter,” said Robert Shanks, Ford’s chief financial officer.

Shanks said Ford’s share of the U.S. auto market grew to 15.9% in the quarter, up from 15.2% a year earlier.

"New models like the Ford Fusion and Ford Escape buttressed by the venerable Ford F-Series pickups and Ford Explorer SUV pushed up market share,” said Michelle Krebs, an analyst with auto information company Edmunds.com.

Ford is also getting more money for its cars “as consumers buy the high-end trim levels and load their Fords with equipment," Krebs said.

Ford is benefiting from U.S. consumers returning to the new car market after delaying purchases because of the recession and more recent sluggish economy, said Thilo Koslowski, an analyst with Gartner Inc.

“But they are still hurting in Europe. The U.S. manufacturers have not figured out how to make the bleeding stop there," Koslowski said.

Ford expects to lose about $2 billion in Europe this year. Its loss in the latest quarter was $462 million, up from a loss of $149 million a year earlier.

The automaker plans to lay off about 6,200 workers in Europe as it closes assembly plants in Genk, Belgium; and Southampton, England; as well as a parts operation in Dagenham, England.

“We are progressing toward our goal for a profitable growing Europe by mid-decade,” Shanks said.

European new car sales fell 10% during the first quarter of this year to 2.9 million compared to the same period a year earlier, the European automakers association ACEA reported last week.

Sales are plunging in even the better European economies. Auto sales fell 13%, for example, in Germany during the quarter.

Automakers have now seen European sales fall for 18 consecutive months.

Ford also lost money in South America where it was hurt by unfavorable currency exchange rates in Venezuela and Argentina. The automaker lost $218 million in the region. That compared to a profit of $54 million a year earlier.

Helped by gains in China, Ford also squeezed out a small $6-million operating profit in its Asia Pacific Africa division. It lost $96 million in those regions a year earlier.

The automaker also earned $503 million from its Ford Motor Credit Co., up from $456 million in the same quarter a year earlier.

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