Ford has reported first quarter 2008 net income of US$100million or 5 cents a share, up $382m from the net loss of $282m, or 15 cents per share, a year ago.
Q1 pre-tax operating profit, excluding special items, was $736m, up $669m from a year ago. After tax operating profit, excluding special items, was $525m, or 20 cents per share, compared with a loss of $172m, or 9 cents per share, the company announced on Thursday.
It said that first quarter cost reductions totalled $1.7bn, including $1.2 billion in North America and reported strong profitability from Ford Europe and Ford South America while Ford North America improved by nearly $600m year on year.
The 2008 operating results exclude Jaguar Land Rover because it is held for sale.
Ford’s first quarter revenue, excluding special items, was $39.4bn, down from $43bn a year ago. Adjusted to exclude the English brands being sold to Tata from 2007 results, revenue would have been up slightly, with favourable exchange about offset by lower volume and net pricing, the company said.
Special items reduced pre-tax results by $416m, or 15 cents per share, in the first quarter. These were mostly charges associated with personnel cuts, dealer reductions and the restructuring of the automaker’s investment in fuel cell maker Ballard.
Ford’s worldwide automotive sector reported a pre-tax profit of $669m, compared with a pre-tax loss of $226m during the same period a year ago.
Revenue for the first quarter of 2008 was $35bn, down from $38.6bn a year ago. Total company vehicle wholesales in the first quarter were 1,531,000, compared with 1,650,000 units a year ago, down because of the exclusion of Jaguar Land Rover and Aston Martin volume in 2008 and lower wholesales in other regions.
North America automotive operations reported a pre-tax loss of $45m, compared with a loss of $613m a year ago. The improvement reflected cost reductions of $1.2bn, including lower structural and product costs. First quarter revenue was $17.1bn, down from $18.5bn a year ago.
South America operations posted a pre-tax profit of $257m, up from $113m a year ago. First quarter revenue increased to $1.8bn, up from $1.3bn a year ago.
Ford Europe pre-tax profits were $739m, up from $219m a year ago. Revenue was $10.2bn, an improvement from $8.6bn a year ago.
Volvo reported a pre-tax loss of $151m, compared with a profit of $94m a year ago. Revenue was $4.2bn, compared with $4.6bn a year ago.
Asia Pacific Africa reported a pre-tax profit of $1m, compared with a pre-tax loss of $26m a year ago. First quarter revenue was $1.7bn, compared with $1.8bn in 2006.
Ford earned $49m from its investment in Mazda and associated operations in the first quarter, compared with $21m a year ago.
The financial services sector pre-tax profit fell to $67m from $293m.
Ford Motor Credit Company reported net income of $24m, down $169m from $193m. On a pre-tax basis, it earned $36m compared with $293m.
The decrease in earnings primarily reflected higher provision for credit losses, higher depreciation expense for leased vehicles, and higher net losses related to market valuation adjustments from derivatives.
“The results of this quarter are encouraging, particularly our outstanding performance in Europe and South America,” said Ford president and CEO Alan Mulally.
“In the past several years, we have substantially restructured these businesses. We believe this is an indication that our efforts to leverage Ford’s global assets across the world will bear fruit. Going forward, we remain committed to our key business objectives, including our goal of reaching North America and overall automotive profitability in 2009 despite the challenging economic conditions.”
“The remainder of 2008 will be a challenge but we are cautiously optimistic despite the external challenges,” Mulally added.