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Posted: Monday, 02 November 2009 7:26AM
Ford Made Nearly $1 Billion in Third Quarter
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DEARBORN, MI (AP) -- Ford Motor Co. earned $1 billion in the third quarter, fueled by U.S. market share gains, cost cuts and the government's Cash for Clunkers rebates.
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The Dearborn, Mich.-based automaker on Monday reported net income of $997 million, or 29 cents per share. Ford says it now expects to be ``solidly profitable'' in 2011. Previously the automaker said it would be break-even or better.
Ford's shares rose 50 cents, or 7.1 percent, to $7.50 in pre-market trading.
The latest results signal that Ford's turnaround is on more solid ground. The company lost more than $14.6 billion in 2008 and hasn't posted a full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its interest payments.
Ford's North American car and truck division - its key business - posted a pretax profit of $357 million, its first quarter in the black since early 2005. Ford cited higher pricing, lower material costs and increased market share for the improvement.
The earnings came despite an $800 million revenue drop. But Ford said it cut costs by $1 billion during the quarter.
Ford still faces obstacles in its turnaround. Last week, workers overwhelmingly rejected an agreement with the United Auto Workers that would have brought Ford's labor costs in line with rivals General Motors Corp. and Chrysler LLC. Workers objected to clauses limiting their right to strike and freezing entry-level wages, and also felt the company was healthy enough and didn't need further concessions.
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Copyright 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. Audio Content and Graphic Content Copyright 2009 WCBS-AM 880.
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