Ford posts earnings, sees solid profit ahead

• Source: Global Times
• [08:08 November 04 2009]
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Ford posted a $1 billion quarterly profit Monday, defying Wall Street forecasts of a loss, as it cut costs and gained market share, leading it to raise its 2011 outlook to "solidly profitable" from break-even.

Ford's shares surged 8 percent as the surprising profit overshadowed news that the United Auto Workers union rejected a tentative cost-cutting deal with the carmaker that would have brought its labor costs in line with US rivals.

The only large US carmaker not to file for bankruptcy in 2009, Ford also said it is seeking to extend its revolving credit facility from 2011 to 2013 and raise another $3 billion of capital through convertible debt and equity offerings.

The quarterly results provided more evidence that Ford has distanced itself from US rivals General Motors and Chrysler, which have struggled to complete restructurings after emerging from government-funded bankruptcies.

Ford seized the North American market share from GM and Chrysler when they halted most production to prepare and execute their bankruptcy cases.

"We're creating a very strong business and we are not taking taxpayer money," Ford President Alan Mulally said. "So the advantages clearly outweigh any potential disadvantage."

Ford reported a $1.3 billion positive cash flow in the third quarter, its first positive since the second quarter of 2007, with forecasts also positive in the fourth quarter after burning $4.7 billion in the first half.

Ford said it was confident the global economy would be improving by 2011, but added that the near-term growth outlook "remains rather uncertain," saying sales are expected to suffer in Europe and Germany in particular, as the government incentive schemes come to an end.

Agencies