Ford Posts $1 Billiion Profit in 3rd Quarter

Ford Motor Company surprised everyone again when they announced their third quarter results by posting a profit of $1 Billion.  The latest results signal that Ford's turnaround is on more solid ground. The company lost more than $14.6 billion last year and hasn't posted a full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its interest payments.

Ford, based in Dearborn, Mich., reported third-quarter net income of $997 million, or 29 cents per share. Its profit forecast for 2011 was a step above previous guidance of break-even or better for the year.

Ford's key North American car and truck division posted a pretax profit of $357 million, the division's first quarter in the black since early 2005. Ford cited higher pricing, lower material costs and increased market share for the improvement.

Excluding one-time items, Ford earned 26 cents per share, blowing away analysts' expectations of a loss of 12 cents.

The earnings came despite an $800 million revenue drop. But Ford said it cut costs by $1 billion during the quarter, accomplished through layoffs in North America and Europe, reduced pension and retiree health care costs and improvements in productivity and product development.

Chief financial officer Lewis Booth said the company took in $1.3 billion more than it spent in the quarter, an improvement over its $1 billion cash burn in the second quarter.

"That's a huge deal," Booth said.

Ford's revenue fell $800 million for the quarter, to $30.9 billion, due mainly to its financial services arm, Ford Motor Credit, making fewer loans.

But the division still posted a pretax profit of $677 million, and revenue from auto operations rose slightly to $27.9 billion.

Ford also has benefited from consumer goodwill after it declined government bailout money and didn't go into bankruptcy over the summer as GM and Chrysler did. Ford grabbed sales from its rivals, posting the largest increase in market share of any automaker in September. Ford expects an overall gain in U.S. market share in 2009, a feat it hasn't accomplished since 1995.

Ford has clearly been on the right path and is proving to the world that they are hear to stay unlike its domestic competitors GM & Chrysler.  What are your thoughts on Ford's progress?

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