Ford Motor Co. produced a profit of $100 million in the first quarter in a surprise turnaround for the struggling auto giant that has been embroiled in deep losses since 2007.
The carmaker' net income was up from the same period last year when a $282 million loss was reported, which contributed to a 2007 loss of $2.7 billion. However, Ford still predicted that it would make a loss for the whole of 2008 as its business in North America continues to be weak.
Ford's shares, now trading slightly higher over the past year, were up 11.8 percent in early morning trade to $8.39.
Quarterly revenue fell to $39.4 billion from $43 billion a year ago. Analysts polled by FactSet Research had expected a loss, on average, of 11 cents a share on revenue of $37.2 billion.
The remainder of 2008 will be a challenge but we are cautiously optimistic despite the external challenges, said Ford's chief executive Alan Mulally.
Ford is in the process of a reshuffling the company which has included the sale of Jaguar and Land Rover to India's Tata Motors, although that sale is not accounted for in these results.
The results of this quarter are encouraging, particularly our outstanding performance in Europe and South America, said Ford president and chief executive Alan Mulally.
The Dearborn, Mich.-based auto maker slashed its second quarter North American production plan and said it would offer more targeted buyouts to union workers at specific plants. The move came after around 4,200 workers were given offers to leave the company.
Sales at Ford dropped 14.3 percent from a year ago to 227,143 vehicles. Its car division benefited from a surge in sales of its Focus sedan, declined 9.6 percent. Truck sales dropped by 16.7 percent, while its top-selling F-Series pickup was also down 23.8 percent.