Ford logs $2.1 billion profit

LOS ANGELES — In another sign that America's auto industry is recovering from a deep downturn, Ford Motor Co. said Tuesday that it earned $2.1 billion in the first quarter of 2010.

The company was helped by a strong turnaround in its North American auto operations, which had an operating profit of almost $1.3 billion compared with a loss of nearly $665 million a year earlier.

Through the first quarter of this year, Ford's F-series pickup was the best-selling vehicle in America and the only auto to cross the 100,000 sales barrier (103,359) year to date. Overall, Ford had three of the top 10 sellers, and its Focus compact car was No. 11.

The automaker sold 441,708 vehicles in the first quarter, according to Autodata Corp., up nearly 37 percent from a year ago and outpacing the industrywide gain of just under 16 percent during the same period. Its 17.4 percent market share is up almost three full percentage points from a year ago and trails only General Motors Co., according to Autodata.

International operations contributed to the quarterly profit, with Ford chief executive Alan Mulally saying "all of our automotive segments reported an increase in sales compared with 2009."

Higher profits at Ford Credit also boosted results.

"We expect to deliver solid profits this year," Mulally said, a prediction company executives had previously reserved to describe their expectations for next year.

"The basic engine that drives our business results — products, market share, revenue and cost structure — is performing stronger each quarter."

However, Mulally offered a word of caution, noting that the "recovery is fragile."

"Global economic conditions are improving," he said, "but recoveries in some markets are modest due to weak labor markets and tight credit."

Ford's profit amounted to 50 cents a share and compared with a loss of $1.4 billion, or 60 cents a share, in the same period a year earlier.

The company's sales rose 15 percent to $28.1 billion.

But the company is still working to pay down a mountain of debt accumulated from restructuring its operations prior to the recession and funding a union trust fund to pay retiree benefits.

"Ford was able to avoid a U.S. government bailout because they mortgaged the farm before the storm struck," said James Bell, an analyst with auto information company Kelley Blue Book. "Ford's success today is imperative to their ability to make full payments back to their lenders."

Ford ended the quarter with $34.3 billion in debt and $25.3 billion in cash. Earlier this month, it made a $3 billion payment to its revolving credit line, but the payment was not reflected in its financial statements because it was made after the end of the first quarter.

Ford is facing a 2013 deadline to pay off or refinance $12.7 billion of its borrowings.

The automaker will launch two key small cars, the Fiesta and the Focus, in the coming months, which are part of its transformation from a truck- and SUV-dependent company to a more balanced auto seller, Bell said. But its continued success in the marketplace is linked to consumer acceptance of the new models, he said.

Other U.S. automakers also are recovering.

Chrysler Group said last week that it had lost $3.8 billion since emerging from bankruptcy in June, but its financial performance was exceeding the expectations of many analysts. During the first quarter, the automaker trimmed its losses to $197 million and managed to scratch out an operating profit of $143 million.

Also last week, the U.S. Treasury said General Motors Co. repaid its entire debt under the Troubled Asset Relief Program. GM, which also emerged from bankruptcy last summer, paid the remaining $4.7 billion of the total $6.7 billion in debt owed to the government. The repayment comes five years ahead of the loan maturity date.