announced this morning it exceeded Wall Street analysts' projections by 5 cents, as the world's second-largest auto maker's third-quarter earnings rose by 11%.
Buoyed by strong sales, a better mix of light trucks and luxury cars and continued cost cutting, Ford's third-quarter earnings increased to $1.11 billion, or 90 cents a diluted share, up from $1.01 billion, or 80 cents a share, in the 1998 third quarter. A consensus of Wall Street analysts polled by
First Call/Thomson Financial
expected Ford earnings to be 85 cents a share.
Efraim Levy, an analyst with
Standard and Poor's Equity
, said Ford had an "excellent" quarter, leaving the auto maker with a company record-high of $25.7 billion in its coffers, which he said gives Ford several options in the coming months. "They might do some acquisitions," said Levy, who has a market perform rating for Ford because the auto industry has enjoyed a strong year in sales but to surpass the figures in 2000 may be difficult. "They haven't closed the door on repurchases and if they do that, Wall Street would love it."
Ford's stock was up 1 to 51 9/16.
Ford's revenue for the quarter rose 16% to $38 billion from $32.6 billion a year earlier.
The auto maker said it had cut costs by $300 million in the quarter from a year ago, bringing the total cost cutting for 1999 to $700 million. Ford still expects to cut another $300 million before the year's end.
Company officials said Ford took several steps forward in the third quarter, including negotiating a new labor agreement with auto workers, increasing stock dividends by 9%, and introducing two new models in North America.
Ford, like many auto makers, posted losses in Europe, because of lower sales and declining market share there, and in South America, where Brazil's weak local economy depressed sales. But Ford said it will begin building a new assembly plant in Brazil.
"We are transforming Ford to maximize the returns on our brand, manufacturing and technology investments to add superior shareholder value," Jac Nasser, Ford's president and chief executive officer, said in a statement.