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Ford Profits Soar In First Quarter

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On: Wed, Apr 28, 2010 at 11:38AM | By: John Welch

Ford Profits Soar In First Quarter

There is a lot to be said for humility. Humility is classy, humility benefits relationships, business or otherwise. Humility can also be profitable. Ford turned down government loans because someone bearing the name Ford was able to swallow his ego, negotiate one bad-ass line of credit, and then step down from his post as acting CEO of the company. The results? In the First Quarter of 2010, Ford saw a 37 percent increase in domestic sales, netting a $2.1 billion dollar profit. Bill Clay Ford Jr., this Bud's for you!

Ford CFO Lewis Booth is quick to downplay the grandeur of Ford's new-found wealth. "We've got a lot of new product launches, so you'll see some launch expense and we do expect some headwinds from commodities prices," Booth explained to reporters. "It would be unwise to think of $2 billion as a running rate."

More details in the post . . .

Analysts predict a slightly less euphoric set of numbers for the rest of the year, taking Toyota's rise in reputation and GM's pending new-car launches into consideration. That hasn't stopped Ford from upping Second Quarter production to just over 625,000 vehicles, a 5 percent increase from a fiscal plan released on March 2nd. Output will rise 39 percent compared with a year earlier.

Having forecast profitability by 2011, CFO Booth has no problem dialing that time table up a bit. "We now expects to deliver solid profits this year, with positive automotive operating-related cash flow."

"Given where we were, even three or four months ago, this says to you that we're really encouraged by the start we had this year."

Ford should keep on truckin'. The launch of the Eco-Boost four cylinder engine, along with the Focus and Fiesta econo cars, will help keep sales at high levels. Booth warns however; "Our price gains will deteriorate with the debut of the Focus and the Fiesta small cars this year because those models are less expensive," he said.

Some factories will close temporarily in the second half of the year, while being converted to build a new version of the Focus compact car, Booth said. This will save money in the short term, while providing new jobs to Americans in the long. Ford seems to be on solid ground, signaling a resurgence of American influence in the international automotive market . . .

Refer to Nick Truden's article on some of Ford's new technology: gee-whiz gadgets that are helping Ford sell cars at an exponential rate!!

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