Money Matters - Simplified

Ford clocks $2.1bn net income in Q1

The Dearborn, Michigan-based company is upbeat about 2010 fiscal year and said that it is anticipating strong results.

Backed by strong sales, and “improvements in its global Automotive operations,” Ford Motor Company [NYSE: F] reported rise in income for the first quarter this year.

The net income for the first three months of 2010 stood at $2.1 billion, or 50 cents per share, after posting loss in the same quarter in the last fiscal year.

This is company’s fourth consecutive profitable quarter after it reported loss of $1.4 billion a year earlier.

In a statement, company’s president and CEO Alan Mulally said, “The Ford team around the world achieved another very solid quarter, and we are delivering profitable growth.

“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.”

Analyzing the quarter
The revenue in the first quarter totaled to $28.1 billion, which is $3.7 billion improvement compared to last year.

The Automotive gross cash amounted to $25.3 billion, up from $24.9 billion a year earlier. The cash consumption was $100 million in the first three months, after the company used $3.7 billion in the first three months last year.

While Ford Europe posted a pre-tax operating profit of $107 million, Ford North America reported $1.2 billion as pre-tax operating profit.

Further, the Ford Motor Credit Company also posted a re-tax operating profit of $828 million in the first quarter this year.

Ford is expecting its global sales to exceed the 65 million vehicle mark achieved last year but it is not negating the fact that consumer confidence is still low, and job market is weak, which can have an adverse effect on the industry.

By the end of the quarter, the company’s Automotive debt stood at $34.3 billion. The automaker did not give details regarding how to pay off the debt.

Forecasting the year ahead
The Dearborn, Michigan-based company is upbeat about 2010 fiscal year, and said that it is anticipating strong results.

Ford has also raised its North American production target by 30,000 vehicles, thus increasing output to 625,000 cars and pickup trucks, which is 39 percent higher compared to the same quarter a year earlier.

Though the company is expecting a profitable year, the automaker is aware of the economic uncertainties.

Ford is expecting its global sales to exceed the 65 million vehicle mark achieved last year but it is not negating the fact that consumer confidence is still low, and job market is weak, which can have an adverse effect on the industry.