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: Ford Motor Co, the only major US automaker to avoid bankruptcy, posted a $997 million net income in the third quarter and its first operating profit since early 2008. It expects to be “solidly profitable” in 2011.
On an adjusted basis, Ford reported a quarterly pretax profit of $1.1 billion, or 26 cents a share, compared with a year-earlier loss of $3 billion or $1.32. Ford beat the 20-cents per share adjusted loss it was forecast to report by an average of 11 analysts surveyed by Bloomberg.
Chief executive officer Alan Mulally, who kept Ford out of Chapter 11 as General Motors Co and Chrysler Group LLC reorganized, is trying to extend sales momentum the Dearborn, Michigan-based automaker built by avoiding a bailout. It posted its first consecutive quarterly net profit under Mulally on Monday.
“Ford is a company that’s well into a turnaround,” said Bernie McGinn, president of McGinn Investment Management of Alexandria, Virginia, which owns about 320,000 Ford shares. “They did it by themselves and didn’t take government money. That gives people a good gut feeling and they’re being rewarded for that.”
The company reported a quarterly net profit of 29 cents a share, compared with net loss of $161 million, or 7 cents, a year earlier. Ford had positive automotive cash flow of $1.3 billion compared with cash consumption of $1 billion in the second quarter. In the year earlier quarter, Ford used $7.7 billion.
Ford finished the third quarter with $23.8 billion in automotive cash, up from $21 billion at the end of the second quarter. Automotive revenue rose $100 million from a year ago, while third-quarter sales fell 2.5% to $30.9 billion as Ford boosted North American production by 18% during the period. The average estimate for total revenue was for $28.5 billion, according to 8 analysts surveyed by Bloomberg.
Ford will end the year with $18.2 billion in automotive cash, said Barclays Capital auto analyst Brian Johnson, who upgraded the shares Oct 20 to “equal weight” from “underweight.” “With improving performance, we continue to expect Ford to meet its minimum cash need through 2011,” wrote Johnson, who is based in Chicago.
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