After GM, Ford’s net profit drops

Ford Motor Co on Wednesday posted a 38 per cent drop in first-quarter earnings, pressured by falling United States sales and rising costs, and further cut its North American production to reduce bloated inventories of unsold vehicles. The second-largest US automaker posted its results a day after General Motors Corp, its larger Detroit rival, reported its worst quarterly result since it skirted bankruptcy in 1992.

Ford’s earnings were substantially higher than Wall Street had expected, and it affirmed its full-year outlook for earnings of $1.25 to $1.50 per share. The Dearborn, Michigan-based automaker revised its full-year earnings outlook on April 8 for the second time in less than a month.

Ford shares rose 2 per cent in premarket trading on the Inet electronic brokerage network, from Tuesday’s close of $9.28 on the New York Stock Exchange.

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But Ford also said for the second quarter, it expects results to be in a range from a loss of 15 cents a share to break even, excluding special items.

The outlook is well below analyst estimates of a profit of 39 cents a share. J.P. Morgan analyst Himanshu Patel said the first quarter upside was impressive but added that the second-quarter outlook will likely disappoint investors. —Reuters