Blue Oval cruises into the black
BY RON HAMMERTON | 29th Apr 2010
The profit of $US2.1 billion ($A2.3b) represents a $US3.5 billion ($A3.8b) turnaround in first-quarter income over last year's $US1.4 billion loss for the first three months of last year.
Ford CEO and architect of its financial stability Alan Mulally declared the ‘One Ford’ plan was delivering “profitable growth”, and he predicted solid profits for 2010.
“Our plan is working, and the basic engine that drives our business results – products, market share, revenue and cost structure – is performing stronger each quarter, even as the economy and vehicle demand remain relatively soft,” he said.
Mr Mulally cautioned that the company was unlikely to maintain the $2 billion-a-quarter profit pace for the remainder of this year, mainly due to launch costs for a number of new models.
In the US, Ford is gearing up for the debut of the 2011 Focus, which will be built simultaneously in Detroit and Europe and sold from May next year, along with Europe’s hot-selling Fiesta light car.
Ford is expecting big things from both of these models, which could well send the company’s profits soaring in 2011 and beyond if all goes to plan.
However, Ford faces higher commodity prices and stronger opposition from a stung Toyota recovering from its safety recall woes and an increasingly robust General Motors.
Ford’s improved balance sheet reflected a strong response for Ford cars in the US, where it enjoyed its largest quarterly market share gain in more than 30 years on the back of a big public appetite for its popular Fusion, Taurus, Focus and F150 models.
The only one of the Detroit ‘Big Three’ to survive the global crisis without falling on its knees to the US government for help, Ford now has a 16.6 per cent market share – up 2.7 percentage points on last year – putting it in second place behind GM and ahead of Toyota.
Ford’s first-quarter revenue was $US28.1 billion ($A30.4b), up $US3.7 billion on the same period a year ago.
The company also finished the quarter with $US25.3 billion in cash, but still saddled with a $US34.3 billion debt. The latter is an increase of $US700 million.
Ford Credit – once Ford’s dependable cash cow that fell on hard times in the GFC – also surged back into profit, recording a $US828 million pre-tax profit in the first quarter, compared with a $36 million loss in the same period last year.
Ford Asia Pacific Africa – which includes Ford Australia – also turned it around, posting a modest $US23 million profit after a $US97 million loss last year, on revenue that surged from $US1.2 billion in the first quarter of 2009 to $US1.6 billion this year.
