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.
Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More
Honda and General Motors are creating a new generation of fully autonomous vehicles. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Whether you hedge inflation or look for a return that outpaces inflation, here's how to prepare. More