Ford Swings to $266-Million Profit
Buoyed again by strong results at its financial services arm, Ford Motor Co. swung to a profit of $266 million in the third quarter even though the loss at its worldwide automotive operations widened and its share of the key U.S. market fell by more than a percentage point.
The nation’s second-biggest auto company raised its full-year earnings guidance slightly Tuesday, primarily because of better-than-expected results at the financial business, Ford Motor Credit Co.
Ford earned 15 cents a share in the July-September quarter compared with a loss of $25 million, or 1 cent, a year earlier.
Excluding special items, Ford’s third-quarter earnings amounted to $537 million, or 28 cents a share, compared with a profit of $278 million, or 15 cents, a year earlier.
The latest results doubled the consensus estimate of 14 cents from Wall Street analysts surveyed by Thomson First Call.
Third-quarter revenue rose to $39 billion from $36.7 billion a year earlier.
Don Leclair, Ford’s chief financial officer, said the company remained on track to deliver a 2004 milestone of $1 billion in automotive pretax profit, excluding special items.
“Our results show continued strong performance in financial services and continuing improvement in North American revenue, even though the market remains difficult,” Leclair said.
Lower North American vehicle production hampered Ford’s automotive business as it tried to offset inflated inventories, but overall results were lifted by net income of $734 million at Ford Motor Credit, up from $504 million a year earlier.
Ford lost $609 million in its worldwide automotive business excluding special items. That was $61 million more than it lost in that business a year ago. Special items included a $23-million charge for restructuring at troubled Jaguar and $41 million related to the revaluation of Ford’s investment in Ballard Power Systems, a fuel-cell manufacturer.
Worldwide automotive revenue rose to $32.8 billion from $30.2 billion in the same period a year earlier.
In North America, Ford’s automotive business lost $481 million, excluding special items, compared with a loss of $108 million a year ago. The company said it was hurt by unfavorable exchange rates and lower production. The company also plans lower production in the fourth quarter versus year-ago levels.
