Southfield (WWJ) -- Ford has posted a third quarter profit of nearly one billion dollars, the first profitable quarter since 2005. The 29 cents per share net income was an improvement of $1.2 billion from the third quarter of 2008.
WWJ's Jeff Gilbert reports Ford's North American operations turned in a profit of $357 million. Ford South America, Ford Europe and Ford Asia Pacific Africa also posted pre-tax operating profits in the third quarter.
"Our third quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy," said Ford President and CEO Alan Mulally in a statement. "Our solid product lineup is leading the way in all markets. While we still face a challenging road ahead, our One Ford transformation plan is working and our underlying business continues to grow stronger."
The Dearborn-based automaker said it now expects to be solidly profitable in 2011.
The earnings came despite an $800 million revenue drop. But Ford said it cut costs by $1 billion during the quarter.
Ford still faces obstacles in its turnaround. Last week, workers overwhelmingly rejected an agreement with the United Auto Workers that would have brought Ford's labor costs in line with rivals General Motors Corp. and Chrysler LLC. Workers objected to clauses limiting their right to strike and freezing entry-level wages, and felt the company was healthy enough and didn't need further concessions.
Ford also has $26.9 billion in debt, up $800 million from the second quarter.
Ford didn't quantify the impact of Cash for Clunkers, which offered buyers payments to trade in their vehicles. The program helped Ford cut costly incentives and raise production. It also won buyers; the Ford Focus and Ford Escape were among the top five sellers in the program. Ford sales were up 17 percent in August thanks to the program.
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.
Shares of Ford, the only Detroit automaker to dodge government aid and bankruptcy protection, rose 50 cents, or 7.1 percent, to $7.50 in pre-market trading.
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