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subject Ford Posts Profit; Loses Money in Autos
By Poornima Gupta DETROIT (Reuters) - Ford Motor Co. (F.N: Quote , Profile , Research ) on Tuesday reported a higher-than-expected quarterly profit as strength in its finance arm once again offset a loss in its automotive business. The profit came as the second-largest U.S. automaker continued to lose share in its key U.S. market. Sales of Ford cars and trucks in the United States fell 8.1 percent in September and 5.1 percent year to date. Ford said third-quarter net income was $266 million, or 15 cents a share, compared with a year-earlier loss of $25 million, or 1 cent a share. Excluding $64 million in charges, including $23 million for restructuring its Jaguar division, Ford said it earned 28 cents a share. On that basis, Wall Street analysts on average were expecting profit of 14 cents a share, according to Reuters Estimates. Shares of Ford rose 2.7 percent, or 36 cents, to $13.75 on INET, before the general market was open. Earnings from both Ford and rival General Motors Corp. (GM.N: Quote , Profile , Research ) , which reported lower-than-expected results last week, show how much the two Detroit auto giants rely on their lending arms, while they cut costs amid a profit-eroding price war. GM lost money in cars and trucks last quarter for the first time since 1998, mainly due to mounting losses in Europe. Ford's automotive unit lost $673 million before taxes, a deterioration from a loss of $604 million a year ago, while its credit arm earned $734 million. Ford Credit posted a 45 percent increase in profits. Ford's core North American vehicle operations lost $481 million before taxes compared with $108 million a year ago, primarily due to lower production volumes and unfavorable exchange rates. Automotive operations are key to Ford's future profitability, especially to achieve its mid-decade, annual pretax earnings target of $7 billion. The automaker also raised its full-year earnings outlook for the fifth time this year to $2.00 to $2.05 per share from a previous estimate of $1.90 to $2.00. The quarterly and annual estimates exclude the costs of the Jaguar actions and other special items. Last month, Ford said it was ending car production at a Jaguar plant in Britain and slashed 1,150 jobs, or 15 percent, of the money-losing division's work force. Ford Europe and Premier Automotive Group, which includes Jaguar, posted a pretax loss of $204 million, an improvement from a loss of $424 million a year ago. The improvement was due to higher sales volume and lower costs at Ford Europe, the automaker said.
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