- Jun 3, 2001
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http://www.autoblog.com/2007/0...r-profit-of-750-milli/
After seven straight quarters of posting losses, Ford has surprised the industry by reporting a net profit of $750 million for the second quarter of 2007. Last year this time the company reported a loss of $317 million. The profit did not come from car sales in North America, as that figure dropped 9 percent in the second quarter, but nearly every other Ford automotive division contributed profit to the company's cause, including PAG, which added a pre-tax profit of $140 million. Other factors that contributed to the profit include Ford Motor Credit kicking in $112 million of profit and the company's continuing effort to reduce its costs, which saved $600 million this quarter.
The profit surprised not only us, but analysts who had predicted another loss and investors on Wall Street, the latter of which have pushed the price of Ford's stock up from $7.97 at Wednesday's close to a spike of around $8.33 this morning. It has since settled down to $8.22/share.
There are big questions looming now that we know Ford is not as bad off as we thought. The first is whether or not this profit is anomaly or if it can be sustained. The sale of Land Rover and Jaguar, as well as Volvo, which Ford confirmed are progressing, should certainly help the bottom line when they happen. The second question is whether the UAW will take advantage of Ford's good news to deny the automaker much needed concessions in its contract negotiations that are occurring as we speak. Only the passing of time will provide answers to these and other questions about Ford's fate, but it's nice to finally see the Blue Oval in the black again.