DETROIT (Reuters)-Ford Motor Co. reported the best first-quarter profit since 1998 such as higher prices for vehicles including its small Fiesta redesigned more than offset the pressure of the prices of raw materials and oil spiking.
The better than expected profit was Ford's strongest first quarter performance since the peak of the SUV boom and reassured investors after a disappointing fourth quarter.
The results also showed the success that the No. 2 u.s. automaker has had in getting consumers to pay more for improved quality and technology in vehicles such as the Focus compact.
Ford also said Tuesday that it expects to ride out the disruption in parts supplies from Japan with only a minimal impact on production in Asia, setting the automaker up to take market share of the Japanese rivals.
Ford's shares, which had slumped 15 percent since the end of January, were up 2.3% at $ 15.90 in the afternoon trade.
The stock almost ten times less has won from the beginning of 2009, but skeptical analysts and investors have cited higher cost engineering and disappointing results in Europe if they are marked down by the car manufacturer prospects earlier this year.
Chief Financial Officer Lewis Booth, Ford reiterated full year profits expected to rise and said that the first quarter results put the carmaker on track to reach that prediction.
"This is a great start of the year," booth told reporters on Ford's headquarters in Dearborn, Michigan.
Ford is the leading maker of the truck, but Chief Executive Alan Mulally has pushed for better balance with the roll-out of such cars as the Focus and Fiesta. He has said repeatedly that Ford brings profit above market share in a break with the practice of car makers of the u.s. in the last few decades.
While the market share of Ford's first quarter fell in North America, South America and Europe, profit per vehicle in its home market with more than 30 percent of last year to more than $ 2,700.
Higher selling prices contributed $ 900 million in taxes Ford's first quarter profit of $ 2.8 billion. By contrast, represented commodity price pressures and other material cost increases a trail of 700 million dollars.
In its home market Ford average margins increased by $ 250 per vehicle from a year earlier, Edmunds.com said.
FORTUNATELY, DEALERS
Mulally said buyers desire for more features in cars helped even if they shift to smaller vehicles prices. He said in an example, heated leather seats were one of the most popular options for the Fiesta.
That successful investors and traders made happy.
"Ford continues to market share. We expect this trend will continue, "said Channing Smith, co-manager of capital advisors Growth Fund, which owns Ford stock.
Mike Jackson, CEO of AutoNation, the largest u.s. dealer group, said the quality of the product was a major factor.
"There is a renaissance underway with Detroit-product, that is the real deal." he said.
Ford was the first u.s. automaker report since the earthquake of March in Japan, and the results of it signaled that General Motors Co also parts of Toyota Motor Corp., Nissan Motor Co. Ltd. and Honda Motor Co., said Morningstar analyst David Whiston.
Ford net income increased to $ 2.55 billion, or 61 cents per share, from $ 2.09 billion, or 50 cents per share, a year earlier. Excluding one-off items got the 62 cents per share, easily topping the average analyst forecast of 50 cents per share, according to Thomson Reuters I/B/E/S.
It was the seventh straight quarter of the operating result.
Turnover rose to $ 33.1 billion of 28.1 billion dollars last year. Analysts had expected on 29.7 billion dollars.
Mulally said results in later quarters of this year might not be as strong as that in the first quarter.
He said on a conference call with analysts, that Ford was well-positioned for what he a marked shift of great cars and trucks on a smaller, more fuel-efficient vehicles.
CFO Booth said since the March 11 earthquake Japan, Ford had lost the production of 12,000 to 14,000 vehicles in Asia, where it has various plants temporarily close.
Any production losses in the short term are likely to recover in the end of 2011 and 2012, said Ford. Production in Ford's business areas outside of Asia has not yet seen much change.
For the first time listed Ford his expected second quarter global production figure of 1.46 million.
Mulally agreed that the industry sales during the summer can slow down, but he said if stocks thanks to sharpen the Japan crisis used-and new-car prices can improve.
Ford said higher commodity costs including oil and gasoline prices, the growth for the rest of the year. It expects that both the raw materials and operational costs with the exception of materials to be approximately $ 2 billion more than last year.
J.P. Morgan analyst Himanshu Patel, in a research note, which was stronger than anticipated results at Ford Credit, which he called "untenable."
Ford credit earned $ 713 million in the first quarter on the basis of taxation. Patel had expected $ 428 million and stronger-than-expected performance on lease residuals credited.
Ford regained her foot in Europe in the first quarter, show a tax operating profit of $ 293 million, up from $ 107 million a year ago. In the fourth quarter, Ford had a loss of 51 million dollars in Europe.
The company also reduced its debt by $ 2.5 billion in the quarter to $ 16.6 billion by redeeming all of its outstanding preferred securities. Ford had borrowed $ 23 billion at the end of 2006, investor concern about its debts.
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