The company said in a statement Monday that the earnings were fueled by cost-cutting measures, increased U.S. market share and the government’s popular “cash for clunkers” rebate program.
The earnings represented the company’s first positive cash flow since the second quarter of 2007, and it said it expects positive cash flow in the fourth quarter as well.
“That’s a huge deal,” Chief Financial Officer Lewis Booth told reporters, according to Reuters.
The net profit of $997 million, or 29 cents per share, signals a turnaround for Ford, which lost more than $14.6 billion last year and hasn’t had a full-year profit since 2005. The company posted profits in all of its operating regions — North America, South America, Asia Pacific and Europe. It’s the first time Ford has posted a profit in its home market of North America since the first quarter of 2005.
Ford also raised its outlook for 2011, which had previously been to at least break even. However, company officials said that the state of the economy meant the near-term outlook was more uncertain.
But some analysts are more confident. Erich Merkle of Autoconomy.com told Reuters he believes the company could be profitable next year.
“As the market starts to turn and sales volumes start to recover, Ford should be solidly in the black next year — certainly ahead of schedule,” he said.
The company has been restructuring since 2005, cutting production capacity, shedding hourly and salaried workers, and selling brands in order to focus on its core brands of Ford, Lincoln and Mercury. It also mortgaged its factories and borrowed $23.5 billion in 2006, in order to fund its restructuring.
But Ford still faces many challenges. Last week the company’s workers rejected an agreement with United Auto Workers that would have frozen entry-level wages and limited the ability of workers to strike, among other provisions. The measure would have brought Ford’s labor costs closer to those of General Motors and Chrysler.