) -- Despite rising commodity prices,
said Tuesday that it is willing to project it will be "solidly profitable" during the current year.
The automaker had been projecting profits in 2011 but had been less clear about 2010. But during an earnings conference call, CFO Lewis Booth declared, "We feel very good about giving guidance, which would be solidly profitable this year, which is an adjective we'd used (regarding) next year. So we've pulled ahead the adjective.
"Given where we were three months ago, we're really encouraged," Booth noted. During the first quarter, Ford produced profits in every segment and improved its net income by $3.5 billion. CEO Alan Mulally said the positive results were "absolutely a manifestation of the strength of our products, the breadth of them -- we're seeing so many new customers." Strong products are "what people really want, in addition to buying from a strong company," he said.
Despite the strong results, Booth reiterated several times during the call that Ford faces a headwind from rising commodity costs. "We do expect to see some bad news on commodities," he said. "It's meaningful, but we're not giving out specific details." On Monday,
executives said steel-price negotiations with Japanese steelmakers would take longer, with the steelmakers seeking price hikes and Toyota unable to raise prices.
Besides commodity-price rises, said Booth, Ford faces price increases in 2011 as it strives to maintain a best-in-class product line, which "does in some cases require some additional product costs." However, he noted, "we've seen the benefit of that in terms of incremental revenue."
At midday, Ford shares were trading down 92 cents at $13.54. At midmonth, Ford ranked second on the NYSE list of the top 100 shorts, with 259 million short positions. Ford shares rose 335% in 2009 and are up about 33% in 2010, which they began at $10.17.
In the first quarter, excluding items, the automaker said its pretax operating profit was $2 billion or 46 cents a share. Analysts surveyed by Thomson Reuters had estimated 31 cents. Revenue rose 15% to $28.1 billion. Analysts had estimated $30.4 billion.
In the same quarter a year earlier, excluding items, the pre-tax loss was $2 billion or 75 cents a share. Ford's pretax profit was its highest quarterly pretax operating profit in six years, and represented a $4 billion improvement from a year earlier.
-- Written by Ted Reed in Charlotte, N.C.
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