Booming US sales drive surge at Ford

FORD Motor Company followed its rival General Motors yesterday in reporting a stronger-than-expected profit for the first quarter, buoyed by booming US sales and the beginnings of recovery in Europe.

Net income from Ford's worldwide vehicle operations was dollars 955m ( pounds 650m), compared with dollars 176m for the first three months of 1993, with the lion's share of the gain coming from capacity car production in the US. Profits from outside North America doubled, however, to dollars 120m from dollars 63m. Excluding Jaguar, Ford's European operations made dollars 108m compared with dollars 19m a year ago.

Ford's strong car-making profits were the best since 1989, but were dissipated by weaker earnings among its financial services group, in particular by a dollars 440m charge to cover losses from the sale of First Nationwide Bank.

After the charge, Ford earned dollars 904m overall - or dollars 1.66 a share - compared with dollars 572m, or dollars 1.02 a share, for the same period in 1993. Excluding the charge, the company made dollars 1.3bn or dollars 2.54 a share, more than 30 per cent better than Wall Street's average estimate.

But Ford's share price dipped on the figures. The markets have come to expect profit surprises from the three US car-makers during the past year, and the one-off charges appear to have led individual investors to conclude prematurely that the US car sales boom has ended.

But the car-makers report that almost all their US factories are operating overtime. Ford said there was pent-up demand for 6.5 million vehicles in the US.