While sales in North America were weak for Ford Motor Co. (NYSE:F), global sales helped make up for it as the company posted a $100 million profit for the quarter, exceeding expectations by a wide margin. Another key factor in the profit was the huge cuts in the North American market.
"Clearly, what's new for us going forward has been the material cost reductions, because that is tougher; and the commodity prices. But also, it means that we have now moved even faster on taking out more of the structural costs," said Ford president and CEO Alan Mulally.
The company added that its former guidance concerning the profitability goals in 2009 remain intact. For 2008 they did say that sales in the U.S. will be lower than originally projected though.
FORD EARNINGS
| Division | 1Q 2008 | 1Q 2007 |
| N. America | ($45 million) | ($613 million) |
| Europe | $739 million | $219 million |
| Asia Pacific | $1 million | ($26 million) |
| South America | $257 million | $113 million |
| Ford Motor Credit | $36 million | $293 million |
North American sales in their auto business ended the quarter with a $45 million pre-tax loss, a huge improvement over the same period last year that had a disastrous loss of $613 million. Even so, revenue for the quarter still fell by 7.6 percent to finish at $17.1 billion. Most of that was blamed on slower SUV and truck sales.
Altogether for the quarter revenue fell to $39.4 billion across all Ford divisions, from the $43 billion last year. Much of that is attributed to not including sales in their Jaguar and Land Rover units which the company is in the middle of selling off.
It's getting harder for Ford to find ways to cut costs in the U.S. because of economic pressures. In their automotive division they've been able to cut costs by $1.7 billion overall, with North American costs falling by $1.2 billion. Cost cuts have been the major reason for the improved financial numbers, but there's only so much of that Ford can do before it becomes detrimental to the business.
Still, the numbers do highlight the importance of a company competing on the global level, as pressures in one market can be at least partially offset by strength in another. Companies in the U.S., and across the world, will fare better in this economic climate than those with strengths and presences only in limited markets.
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The release of the quarterly results for Ford (NYSE:F) Motor Co. today surprised a lot of people as the company posted a $100 million profit; exceeding everyone's expectations.What led the company was its global sales, as its North American sales... [Read More]
Tracked on: April 24, 2008 2:24 PM | Permalink to Trackback