Brisk sales and higher prices helped Ford Motor Co. to one of its best first-quarter profits in years. Ford said Tuesday it earned $2.6 billion, or 61 cents a share, in the first quarter of the year, compared with a profit of $2.1 billion, or 50 cents a share, during the same quarter a year earlier. It was the automaker's best first quarter since 1998.
Revenue rose to $33.1 billion from $28.1 billion. In morning trading, Ford shares were up 48 cents, or 3%, to $16.02.
"Our team delivered a great quarter, with solid growth and improvements in all regions," said Alan Mulally, Ford's chief executive.
Ford is benefiting from a greater sales volume and higher automobile prices. In the U.S., its vehicles are selling on average for $33,173, about $2,400 more than they did a year ago, according to TrueCar.com, an auto price information company.
"Ford opened 2011 with a very solid quarter that should put to rest investor concerns, especially around its North American earnings power," said Brian Johnson, an analyst with Barclays Capital.
Additionally, its plan to share vehicle platforms and components globally is driving improvements in profitability and operating margin. It also has built a selection of fuel-efficient passenger cars, such as the Fiesta, Focus and Fusion, and is better able to deal with high gas prices compared with previous fuel-price spikes.
"Ford's momentum stems from the company's balanced product portfolio and its commitment to refresh its lineup at an aggressive pace, which keeps dealers excited and continues the buzz among car shoppers," said Jessica Caldwell, an analyst at auto information company Edmunds.com.
Ford does have some challenges in the U.S. market. Competitors are targeting its success, Caldwell said. The company also is still having problems turning around its Lincoln luxury-car division, which lags far behind American rival Cadillac and the big German and Japanese luxury brands.
Powered by its core Ford brand, the automaker's operating profit in the North American market reached $1.8 billion, compared with a profit of $1.2 billion a year ago. Its business in Europe, South America and Asia also was profitable.
And Ford improved its balance sheet. The company finished the quarter with $16.6 billion in debt for its automotive operations, down $2.5 billion from the end of 2010. The automaker has been working to lower its debt after borrowing heavily in 2006 to restructure the company and prepare for the industry downturn.
But such robust profits will be harder to achieve in the latter part of the year. Ford expects earnings to decline at its Ford Credit finance unit. Moreover, it is facing increased commodity costs as well as higher expenses to pursue its longer-term growth and brand plans.
The company also has had some minor disruptions in factory operations globally because of parts shortages caused by the recent Japanese earthquake and tsunami.
"We are managing this on a day-by-day basis," Mulally said, adding that, so far, the effect had been "minimal."
