Ford Motor Co expects earnings improvement in 2011 after solid profits in 2010 as its turnaround gains traction, executives said at its annual meeting of shareholders on Thursday.
Ford, which posted a profit in 2009, is focused on reducing a high debt load, but would make dividend reinstatement a topic for future discussion after it addresses its balance sheet, Executive Chairman Bill Ford Jr. said.
We have to get the balance sheet strong as our top priority, Ford said during the meeting.
In April, Ford said it expects a solid pretax profit in 2010 excluding special items. Its previous forecast was 2011 profit on that basis. The automaker posted losses of $30 billion from 2006 through 2008.
Ford lowered its break-even point in a restructuring that avoided bankruptcy, while gaining most of the cost cuts that Detroit-based rivals General Motors Co and Chrysler Group LLC achieved in government-supported bankruptcies.
Ford has a far heavier debt load than GM or Chrysler after taking a more than $23 billion home improvement loan in late 2006 and had $31.3 billion of automotive debt after a repayment in April. It expects debt reduction efforts to accelerate as it produces positive cash flow and profits.
(Reporting by David Bailey; Editing by Derek Caney)