For the first time in two years, the concern showed profit

auto industry

The American automaker Ford yesterday published financial results for the second quarter of 2007. For the first time in almost two years of operation, Ford showed a profit. Analysts explain this, among other things, by the sale of Aston Martin, and the concern itself says that it intends to sell off assets further.

According to Ford's reporting for April-June, the automaker's revenue increased by 5%, to $44.2 billion. Ford's net profit reached $750 million ($0.31 per share). Thus, Ford showed profit for the first time after seven quarters of unprofitable activity. In particular, the automaker's loss for the second quarter of 2006 was $317 million. Based on the results of the second quarter of 2007, analysts predicted a loss of $0.34 per Ford share. “We are encouraged by the emerging progress, although we understand that further work (to bring the company out of the crisis. - Kommersant) will be a kind of test for us,” Ford’s press service quoted the words of the company’s president and chief executive officer Alan Mulally. He also explained that Ford "will focus on four things: restructuring the business, bringing new products to market, strengthening its balance sheet and improving operational efficiency."

As industry analysts have repeatedly noted, Ford's main losses come from its North American division—the decline in Ford sales in the US market in 2006 amounted to 9%. The main reason for the drop in sales is a decrease in demand for Ford's traditional large-engine cars. As a result, at the end of 2006, Ford suffered a record loss in its history of $12.7 billion. It got to the point that in November 2006 the concern was forced to pledge all its assets in order to obtain a loan of $18 billion.

To bring Ford out of the crisis, the concern's top management has developed a restructuring program that involves the closure of 16 out of 41 plants in the United States with the layoff of 45 thousand people. 9 factories will be closed in 2007. In addition, in March, Ford sold its British division to Aston Martin for $925 million. According to Bloomberg analysts, it was this deal, as well as cost reductions, that allowed the automaker to make a profit in the second quarter of 2007.

Yesterday, Mr. Mulally said that Ford will continue to sell assets: according to him, the concern is considering the sale of Jaguar and Land Rover (see Kommersant of June 16) and will reconsider Volvo's development strategy. Western media reported that Ford had already hired KPMG to evaluate Jaguar and Land Rover. Mr. Mulally did not name possible bidders for the purchase of stamps yesterday. Previously, Cerberus, One Equity, Ripplewood Holdings funds, as well as the Indian automaker Tata Motors were named as contenders. However, Ford management previously said that all these actions would still not bring Ford into profit at the end of 2007.

EKATERINA Kommersant-DUDAREVA, DMITRY Kommersant-BELIKOV

Ford came out of the red