Ford: Best first quarter since '98

By Chris Isidore, senior writer


NEW YORK (CNNMoney) -- Ford Motor combined strong sales and improved pricing to roar past earnings forecasts and post its best first-quarter profit since 1998.

Ford earned $2.6 billion, or 61 cents a share, up 22% from a year earlier, the company said Tuesday. The earnings not only topped the consensus forecast of 50 cents a share, they were better than the most bullish estimate of any analyst surveyed by earning tracker Thomson Reuters.

The last time Ford earned this much in the first quarter was in 1998, when the company sold part of its financial services unit. The past quarter's performance underlined the continued turnaround at the company, which has now posted seven straight quarters of profit after years of losses.

Shares of Ford (F, Fortune 500) climbed nearly 3% in morning trading to $15.96. Ford's stock has struggled since the company missed earnings forecasts with its fourth-quarter results, then was hit by investor worries about the impact of higher gas prices.

Revenue rose 18% to $33.1 billion, which also easily topped the most optimistic forecasts, as the number of vehicles Ford sold worldwide climbed 12%. In March, Ford's U.S. sales topped those of rival General Motors (GM) for the first time since 1998.

"Our team delivered a great quarter, with solid growth and improvements in all regions," said CEO Alan Mulally in the company's earnings statement.

Mulally told analysts and journalists that rising gas prices could slow economic growth both domestically and worldwide, but that Ford still anticipates stronger demand for cars the rest of the year.

That forecast was buttressed by the consumer confidence survey released Tuesday by the research organization The Conference Board, which found 4.7% of consumers intending to buy a new car in the next six months, despite lingering concerns about the economy. That is the highest intention-to-buy reading in that part of the survey since 1999.

Mulally said the gas price rise is causing a shift towards smaller, fuel-efficient vehicles, which typically sell at a lower profit margin that larger cars and trucks. But he said Ford's new lineup of small cars leaves it well positioned for this shift, and Ford is finding small car buyers willing to pay extra for more features on their cars.

While the number of vehicles sold was not a surprise, the revenue per car was stronger than analysts had expected, helping the company to exceed expectations. Improved pricing allowed it to post increased profits in all of its various regions worldwide.

Ford did not give a specific earnings target for the rest of the year, although it said it expects to continue to post improved results. But it warned that lower profit from its Ford Credit unit, higher commodity prices, seasonal factors and the need for increased investments and costs related to its longer-term plans will make it difficult to match the first quarter's strong results later this year.

Still, Ford said it expects to continue to gain market share in both the U.S. and European markets. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,042.90 -28.32 -0.17%
Nasdaq 4,493.39 -12.46 -0.28%
S&P 500 1,972.29 -5.51 -0.28%
Treasuries 2.51 0.02 0.68%
Data as of 5:47am ET
Company Price Change % Change
Ford Motor Co 14.79 -0.32 -2.12%
Bank of America Corp... 17.05 0.04 0.24%
eBay Inc 56.63 3.97 7.54%
Apple Inc 100.75 0.64 0.64%
General Electric Co 25.62 0.20 0.79%
Data as of Sep 30

Sections

CNNMoney's Italian-American investing correspondents did a taste test of Olive Garden's food. They agree with hedge fund Starboard: It's not very appetizing. More

Even limited air operations could cost up to $4 billion a year, says a think tank, while large ground forces could cost $1.8 billion a month. More

Pro-democracy protesters in Hong Kong are using FireChat to improve communication and organize. More

On Wednesday, 17% of First Green Bank's 66 employees will get a raise under the company's new "living wage" program. The guarantee: At least about $30,000 a year. More

This mom of four only makes $29,000 a year and is losing $400 a month because the state is garnishing her paycheck over a debt. Now she is about to be evicted from her apartment. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.