North America Drives Strong First Quarter Profit at Ford

DEARBORN (AP) - Ford posts a $1.6 billion dollar first quarter profit. That's a fifteen percent increase from last year, but was still hampered by big losses outside of North America.

"We are off to a very good start to the year," said Ford Chief Financial Officer Bob Shanks.

Ford had a record performance in North America, with pre-tax earnings of 2.4 billion dollars.

"We had very good growth in the business, both in terms of volume and revenue for the quarter, up about ten per cent on a year over year basis," said Shanks.

Ford's operating margin in North America hitting 11 percent in the first quarter. Shanks says the company kept a line on expenses, with new products doing well in the marketplace.

"The new products that we've introduced over the last several months doing extremely well and driving these results," he said. "C-Max, Fusion, Escape. But, Explorer, way way up, F-Series doing well."

Ford's first quarter sales in the U.S. were up by more than ten percent.

"They saw the F-series increase 17 percent year-over-year," said Alec Gutierrez, who's a senior analyst with Kelly Blue Book. "Both the Fusion and Escape saw a sales increase of more than 20 percent."

These are all products that are being sold with fairly low incentives. Edmunds.com estimates that Ford's incentive spending is down 2.2 percent from last year.

Ford, meanwhile, is struggling to turn around its European operations. They lost $462 million in the first quarter. The company still estimates a $2 billion loss in Europe for the full year.

But, Shanks says they have begun the turnaround that will get Europe back to break even by mid-decade.

"Tremendous performance by the team in Europe in getting us off to a very good start in terms of our transformation plan. We've launched 7 of the 15 products that we announced in Amsterdam about a year or so ago."

Ford's pre-tax profit of $2.1 billion was less than some analysts were expecting. The company's stock, in early trading, remained fairly even.

Ford maintained its guidance for the rest of the year, with North America remaining the main profit generator.

Connect with Jeff Gilbert
Email: jdgilbert@cbs.com
Facebook: facebook.com/carchronicles
Twitter: @jefferygilbert