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Ford Earns $2.4 Billion In 2nd Quarter

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INTERVIEW: WWJ AutoBeat Reporter Jeff Gilbert talks one on one with Ford CEO Alan Mulally.

DEARBORN (WWJ) Ford posts a 2.4 billion dollar second quarter profit, coming in right where analysts expected. It's a solid financial picture, but off about 8 per cent from last year.

"Our total sales are up," said CEO Alan Mulally. "Our market share is up, based on the strength of our new products."

Ford revenues were up 13 per cent, on strong sales of new products.

"The new products are doing very well," said analyst Michelle Krebs of Edmunds.com. "Ford Focus, Ford Explorer, the Fiesta are doing extremely well. In fact, one of their issues is not having enough inventory."

Costs were up too, because of higher prices for raw materials. Ford also spent more on product development, and trimmed $2.6 billion from its debt.

"Which takes us down to $14 billion, which is on our way to our target of $10 billion," said Mulally.

Analysts like Michelle Krebs consider that money well spent.

"It is so significant for Ford to get that debt down, because they have a lot of it. They are not in the same position as General Motors and Chrysler," she said. "They did not get help from the federal government and they took in a lot of debt long before the great recession."

Ford earned money in every part of the world, making $1.9 billion here in North America, an improvement from last year. Ford also posted improved earnings in its core auto making operations, $2.3 billion.

Mulally said Ford earnings will slow a bit in the second half. But, he still expects the company to show improvement for the year as a whole.

"With the performance for the first half, we are clearly on track to exceed our full year outlook, which is the most important thing."

Mulally said Ford still takes risks from the uncertainty in the overall economy. He's also concerned about the potential impact of negotiations in Washington over raising the debt ceiling.

"Any uncertainty is a concern for all of us as we plan our lives and we plan our purchases," he said. "I think the important thing for me that everybody is getting very, very serious about addressing these issues, not only the debt ceiling, but also our budget deficits going forward and our trade deficits."

RELATED LINK: Chrysler posts loss, shows progress.

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