2Q Profits of $2.6 Billion for Ford

Ford Motor Company reported profits of $2.6 billion during the second quarter as auto sales in the United States increased by 20 percent and the carmaker continued to capture market share.

On its central automotive operations in the second quarter, Ford made $2.1 billion, compared to a loss of $1.1 billion one year earlier.

Revenue increased by 17 percent, or $4.5 billion, to $31.3 billion.

The results exceeded a previous projection made by Ford’s CFO Lewis Booth, who in April said that the automaker’s first-quarter profit of $2.1 billion would be the highest of the year.

All of Ford’s automotive operations worldwide turned a profit and showed improvement in the most recent period. In the first six months of 2010, Ford made $4.7 billion, which is its largest first-half profit in 12 years. Ford has also enjoyed five consecutive profitable quarters now.

Ford’s North American automotive business made a pre-tax operating profit of $1.9 billion, contrasted with a loss of $899 million the previous year. Ford pointed to better sales and more favorable prices to explain the $2.8 billion fluctuation in its North American results.

North American automotive revenues in the second quarter rose by $6.2 billion, or 58 percent, for Ford to $16.9 billion.

Higher Transaction Prices

Ford’s light vehicle sales in the United States increased by almost 90,000 units, or 20 percent, to 539,644 units in the second quarter.

The carmaker is restricting discounts and asking for higher prices on new vehicles like the Ford Mustang, Taurus, and F-150 Super Duty truck.

New vehicle models showed a $1-billion improvement in net pricing during the second quarter relative to one year ago, with spending on discounts down $500 million in addition to $500 million in overall price increases.

Ford Credit earned second-quarter pre-tax operating profits of $888 million, which is a $242-million improvement from 2Q 2009 and a $60 million increase from 1Q 2010.

“We delivered a very strong second quarter and first half of 2010 and are ahead of where we thought we would be despite the still-challenging business conditions,” said Ford CEO Alan Mulally in a statement.

The results handily exceeded expectations on Wall Street and helped propel Ford shares three percent higher to $12.43 in New York Stock Exchange trading early today.

Today, Ford reported that the second half of 2010 will not be as profitable as the first half because of additional costs to launch new vehicles, smaller decreases in Ford Credit’s reserves, and an increase in commodity prices. Booth reported that prices for aluminum, steel, and copper will rise by $1 billion in 2010.