Ford Motor's third-quarter profit beat estimates and boosted its outlook for the year on rising demand for F-Series pick-ups in North America and progress shrinking losses in Europe, it said yesterday.
Ford reported net income of $1.27 billion (R12.4bn). Excluding one-time items, the per-share profit was 45c, exceeding the 37c average estimate of 15 analysts in a survey.
The second-largest US car manufacturer raised its forecasts for total company pretax profit and operating margins for the full year.
The results show that chief executive Alan Mulally's turnaround is advancing and lessened concern that the company would suffer should he decide to leave early. Microsoft board members have spoken with the executive about being a candidate for its next chief executive, people with knowledge of the talks have said.
Ford has said Mulally will stay through at least 2014.
"Alan Mulally is in very many ways directly responsible for Ford's transformation," said Michael Razewski, a New York-based principal at Douglas C Lane & Associates.
"The heavy lifting has been done in North America, they're working through their issues in Europe, and the China growth strategy is in place.
"This isn't necessarily a business that needs to be transformed anymore."
Mulally has turned around Ford by broadening its line-up with more competitive cars and expanding its presence in markets such as China. He has turned over key management duties, such as the running of the main weekly meeting of executives, to chief operating officer Mark Fields.
Ford shares rose 2.9 percent to $18.03 at 7.55am in New York before regular trading yesterday. It rose 35 percent this year through Wednesday, compared with a 22 percent gain for the Standard & Poor's 500 index.
Ford said it now expected total company pretax profit and the automotive operating margin to be higher than last year. The company previously said profit would be about equal or higher and the margin would be about equal or lower.
In Europe, Ford now forecasts a full-year loss of less than $1.8bn, a smaller deficit than the company had previously estimated.
The third-quarter results compared with 40c a share, excluding some items, and net income of $1.63bn, or 41c a share, a year earlier.
Ford earned a $2.3bn quarterly profit in North America. Its third-quarter operating margin of 10.6 percent in the region compares with 12 percent a year earlier.
Results in its home market were bolstered by rising demand for its F-Series pick-ups. Large pick-ups generate $8 000 to $10 000 in gross profit and account for the bulk of North American earnings at Ford and General Motors (GM), according to Morgan Stanley.
Ford F-Series US deliveries surged 21 percent to 559 506 this year through September. That widened its lead over GM's Chevrolet Silverado and GM Sierra sales, which increased 18 percent and Chrysler Group's Ram pick-ups, up 19 percent.
Ford's operations outside North America earned $57 million, the company's best result on that basis since the second quarter of 2011, chief financial officer Bob Shanks said. The company's global automotive operating margin improved to 7 percent, also the best in more than two years.
"What everybody is waiting to see is can you get the rest of the business moving in the right direction" Shanks said of the company's operations outside North America. "A lot more work to do, obviously, but the progress and the direction is what's really exciting."
The company's outlook on Europe has improved from its July forecast. - Bloomberg
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Original headline: F-Series demand lifts Ford's profit, outlook
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