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NEW YORK : Ford Motor Co. raced ahead of expectations in the first quarter as the struggling auto giant Thursday posted a narrower loss of US$282 million.
That compared with a loss of US$1.4 billion in the same period a year ago, and was well ahead of market expectations as the company progressed with a painful reorganisation.
The loss equated to nine cents a share excluding one-time costs, much better than the deficit of 60 cents per share expected on Wall Street.
Revenues for the January-March quarter increased five percent to US$43 billion, also better than market forecasts.
The company said its Europe, South America and Mazda divisions all were profitable and that cost savings in North America were starting to help the results.
"We are making progress on executing the four priorities of our plan - restructuring the company, accelerating product development, funding our plan and working effectively as one team," said chief executive Alan Mulally.
"I am pleased that the basics of our business are improving, but we still have a lot of work to do."
JP Morgan Securities analyst Himanshu Patel said the results were "sharply better than expected," and "quite impressive."
"Expect positive reaction, although we caution that Ford has had a historical tendency in recent years to show unexpected seasonal strength in the first quarter," the analyst said.
Briefing.com analysts said the Ford results were "among the biggest surprises" for the market and that shares in the automaker were shooting up 10 percent in pre-market deals.
The company said cost cuts saved US$500 million in the quarter, bringing the total amount of annualised savings to US$1.9 billion since the reorganisation plan was announced last year.
Ford wants to cut five billion dollars from annual operating costs by 2008, in a plan that features the elimination of 44,000 jobs and closing a number of North American plants.
Despite the improving results overall, Ford's North America automotive operations saw its loss rise to US$614 million compared with US$442 million a year earlier.
This resulted from "unfavourable volume and mix, partially offset by cost reductions," Ford said. Revenue was US$18.2 billion, down from US$19.8 billion for the same period a year ago.
The European division showed an operating profit of US$219 million, up from US$65 million a year ago as revenues increased.
The division for Asia Pacific and Africa swung to a loss of US$26 million amid "adverse currency exchange and unfavourable volume and mix," according to the company.
Ford's Premier Automotive Group, which includes Jaguar and Volvo, reported a record profit of US$402 million on higher revenues. Ford reached an agreement in the quarter to sell the Aston Martin nameplate. - AFP/de
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