DEARBORN (WWJ) – Ford posted a solid $1.6 billion third quarter profit, the 10th consecutive quarter that the company has earned money. That works out to 41 cents a share.
“We’re well on track to meet our business performance objectives of improving both the total company operating profit and our operating related cash flow in 2011 over 2010,” said Ford CEO Alan Mulally.
Interview: WWJ AutoBeat Reporter Jeff Gilbert talks one-on-one with Ford CEO Alan Mulally.
Take out one-time charges of about $350 million and the earnings are closer to 46 cents a share, slightly better than analysts expected. The earnings, however, are off 2 percent from the third quarter of 2010.
Stronger sales pushed Ford’s revenue up 14 per cent to $33.1 billion.
Ford earned $1.3 billion in its core auto making operations. Ford credit posted a $581 million profit.
Ford reduced its debt by $1.3 billion in the third quarter. That debt now stands at around $12.7 billion. Ford wants to reduce it to $10 billion.
For the first nine months of this year, Ford has earned $6.6 billion.
The strong performance has many investors in Ford wondering about the company’s dividend. Mulally said it would be restored, but wouldn’t say when.
“The fact that we are improving our balance sheet now has got us in a position where we are going to be able to restore that dividend,” he told WWJ AutoBeat Reporter Jeff Gilbert. “The timing we are giving is ‘sooner, rather than later.”
Analysts say the third quarter was a solid performance for Ford, and is based on solid sales.
“Ford has had some very strong products here and abroad,” said Jeff Schuster, director of global forecasting at J.D. Power and Associates. “I think they’ll continue to develop the brand. Now, I think the focus is shifting over to Lincoln.”
Ford is in the midst of an effort to revamp the Lincoln brand. Another important area the company is working on is foreign operations.
The bulk of Ford’s profits came in North America, where the earnings number was also $1.6 billion. Ford posted losses of $306 million in Europe, and $43 million in Asia Pacific. Ford earned $276 million in South America.
“Clearly, with the sovereign debt and other financial issues, the economy is slowing, which is a concern,” said Mulally. “But, I’m pleased that all of the leaders are working on getting their fiscal house operating again.”
One other concern about Ford is declining quality and reliability rankings from J.D. Power and, just this week, from Consumer Reports.
Many consumers have had issues with the “My Ford Touch” system that controls many aspects of the vehicle. Owners have complained that it has problems and is difficult to use.
“We treasure that input,” Mulally said. “We have incorporated the customer feedback and the suggestion they had for improvement.”
Mulally, however, said systems like My Ford Touch are more of a help to Ford, and remain reasons that people buy the company’s products.
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