Ford profit up 19% as sales set record in North America

DEARBORN, Mich. - Ford Motor Co. said Wednesday that its net income rose 19 percent in the second quarter, to $1.2 billion, as it reported record sales in North America and Asia and stanched losses in Europe.

The automaker surpassed analysts’ expectations by reporting global revenue of $38.1 billion, an increase of 15 percent from the same quarter a year ago. Pretax operating profit was $2.6 billion, up $726 million.

Strong sales in North America continued to carry the company as it loses money in Europe and restructures its operations there and invests heavily in China. It was the 16th-consecutive profitable quarter for Ford.

Ford said its market share grew in its four crucial global markets: Europe, South America, Asia Pacific Africa and North America, where it grew nearly a full percentage point to 16.5 percent.

“Our strong second quarter with improved results in every region around the world is another proof point that our One Ford plan is continuing to deliver and is building momentum,” Alan Mulally, Ford president and chief executive, said in a statement.

The record sales in North America, as well as the gradually improving European market, prompted Ford to raise its full-year outlook, which now calls for pretax profit to equal or surpass 2012.

“We’ve already blown past what we did last year,” Robert Shanks, chief financial officer, told reporters at Ford’s headquarters in Dearborn.

The automaker reported a pretax loss of $348 million in Europe but said that was an improvement from both the second quarter of last year and the first quarter of this year. Ford said it expected to lose $1.8 billion in Europe this year, less than the $2 billion it had previously projected.

Ford’s European market share increased this quarter to 8.1 percent from 7.6 percent, a significant development “ because the industry is down, and our retail share is up,” said Jay Cooney, a Ford spokesman.

In Europe, Ford said it would focus on retail sales at the expense of the fleet market and expects to bolster its bottom line after closing two facilities in Britain - a vehicle assembly plant in Southampton and a stamping and tooling operation in Dagenham - this week and another, in Genk, Belgium, late next year.

In the Asia Pacific region - and China, in particular - Ford said it recorded its highest pretax profit of any quarter. Overall, the region’s pretax profit was $177 million, compared with a $66 million loss in the second quarter last year. Market share grew 1 percentage point, to 3.6 percent.

Ford also reported its market share in China rose from 2.8 to 4.3 percent.

The automaker is investing heavily in China, adding jobs, plants and new vehicle models. Ford has introduced three small utility vehicles this year and plans to introduce five new plants, add 300 dealerships and double its workforce by 2015.

South America also returned to profitability, fueled by the popularity of the Ranger and EcoSport models, Shanks said. Pretax profits there totaled $151 million, compared with $5 million last year. Ford’s market share grew slightly to 9.6 percent from 9.4 percent.

The quarter’s results also prompted Ford to raise its expectations for sales in the United States, Europe and China this year.

Ford shares rose 43 cents, or 2. 5 percent, to close Wednesday at $17.37.

Business, Pages 25 on 07/25/2013

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