Although analysts expressed caution over automakers’ third quarter results, it seems the Ford Motor Company is still on something of a hot streak. The automaker announced today it posted a $ 1.7 billion profit in the third quarter of 2010.
While smaller than Ford’s second quarter profit of $2.6 billion, the figure is a substantial improvement over the same time period last year, when it reported a $997 million net income. According to Ford, this is the automaker’s best third-quarter result ever, and it marks the sixth straight quarter of operating profit.
“This was another strong quarter,” CEO Alan Mulally said in a prepared statement, “and we continue to gain momentum with our One Ford plan. The key drivers for improvement in 2011 will be our growing product strength, a gradually strengthening economy, and an unrelenting focus on improving the competitiveness of all our operations.”
The automaker’s overall revenue fell $1.3 billion to $29 billion, but the loss is largely attributed to the sale of Volvo to Geely — in fact, excluding the sale, overall revenue was up $ 1.7 billion. Better news stems from the automaker’s automotive operations. Pre-tax earnings totaled $2.05 billion, but $1.2 billion — roughly 58 percent of that total — came from the automotive side (and mostly from North America, to boot), while the remaining $761 billion was attributed to Ford’s financial services.
Shareholders will likely be appeased with earnings of $0.43 per share, but the automaker’s work is still cut out for it. Presently, the automaker still carries $26.4 billion in debt, and executives are working fervently to slash that figure as quickly as possible. Ford plans on making another payment to the UAW VEBA retirement fund this Friday, which is expected to cut that figure down to $22.8 billion.
Although Ford tells Automotive News it plans to carry some debt to help it secure credit going forward, the company is reportedly still “ways off” from its ideal debt figure. After the VEBA payment, Ford will have parsed its debt by $10.8 billion since December 31, 2009, but executives still insist the company plans on virtually eliminating the remainder of its outstanding debt by the end of 2011.
Will Ford’s momentum continue? Only time will tell, but given the automaker’s substantial North American market share, along with an increase in revenue earned per vehicle sold, many — if not all — of the signs look encouraging.
Source: Ford, Automotive News (Subscription required)