News - Ford
Ford’s star continues to rise
New models, rising sales and reduced debt deliver $2.6 billion Q1 profit at Ford
27 Apr 2011
FORD Motor Company’s first-quarter net profit soared to $US2.6 billion ($A2.4b) – its best Q1 result in 12 years – as the Blue Oval’s product-led recovery hit top gear.
New fuel-efficient vehicles such as the Focus, Fiesta, Fusion, Edge and Explorer helped to propel Ford’s profits upwards by 22 per cent or $US466 million ($A431m) over last year’s first-quarter return and put the Dearborn-based company on track for its third consecutive year in the black.
Ford president and CEO Alan Mulally said the Ford team had delivered a great quarter, with solid growth and improvements in all regions.
“We continue to accelerate our One Ford plan around the world, delivering on our commitments to serve our global customers with a full family of best-in-class vehicles and deliver profitable growth for all, despite uncertain economic conditions,” he said.
Ford not only lifted Q1 sales revenues by $5 billion, to $33.1 billion, but slashed automotive division debt by $2.5 billion to help its cause by reducing its interest bill.
Vehicle wholesales were up 150,000 units, to 1.4 million, and the company is forecasting another lift to 1.5 million for the second quarter, putting Ford on track for annual sales of almost six million units in 2011 compared with 2010’s 5.3 million.
Left: Ford president and CEO Alan Mulally.
“We expect our annual volumes to continue to grow substantially, driven primarily by our growing product strength, a gradually strengthening global economy and an unrelenting focus on improving the competitiveness of all of our operations,” Mr Mulally said.
According to US reports, Ford not only sold more vehicles but increased each one’s average profitability in North America as the US eased out of its economic doldrums.
All of Ford’s regions recorded a pre-tax operating profit, including its two biggest – North America and Europe.
More than half of the profit – $US1.8 billion – was made by North America, where sales were up 16 per cent year on year with the introduction of a new wave of models, including the European-designed Fiesta and Focus, and a rejuvenated F-Series pick-up.
Ford of Europe also came back strongly from the global financial crisis, reporting a first quarter pre-tax operating profit of $293 million, an increase of $186 million over 2010.
The Asia Pacific Africa division, which includes Australia and China, generated revenue of $2.1 billion – up by $500 million – for a $33 million pre-tax profit.
In 2010, Ford reported a full-year profit of $8.3 billion – almost double that of cross-town rival General Motors ($4.7b) and way ahead of Chrysler’s net loss of $693 million.
The only shadow on Ford’s Q1 performance was a $115 million decline in Ford Credit’s pre-tax operating profit, to $713 million.
The decrease was blamed on lower market valuation adjustments for derivatives and lower receivables volume.
Ford estimates the full-year profit of Ford Credit will fall about $1.1 billion in 2011, but will remain in profit with distributions of about $3 billion.
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