July 24 - Strong pickup sales and record results in Asia boost Ford's profit, and the automaker raised its outlook. Fred Katayama reports
Strong sales of its pickup trucks and the pickup of its overseas businesses drove Ford's second quarter profit up 19 percent. Those earnings and revenue breezed past expectations. Pre-tax income rose to a record at its biggest profit center, the U.S. But its North American profit margin of 10.4 percent disappointed some bulls, given the brisk sales of pickups like its iconic F-150. What really wowed Wall Street - as well as CFO Bob Shanks - was Ford's performance overseas. SOUNDBITE: BOB SHANKS, CHIEF FINANCIAL OFFICER, FORD (ENGLISH) SAYING: "That's why we're so excited about what we've seen in the second quarter. When you take South America, Asia Pacific, Africa, and Europe, you add them all up together, they were breakeven. If you go back just one quarter ago, they lost $600 million. We're clearly working very hard in all three of these regions to have all of them collectively and individually contribute their appropriate contribution to our bottom line." In Europe, where it is restructuring its operations, it shrank its losses and cut its loss estimate -- a sign, the company says, that the economy may have begun to stabilize. And amid China's economic slowdown, Ford guzzled market share in the world's largest auto market with its new Focus. That enabled the Asia region to reverse its loss, and Ford now expects Asia to be profitable for the full year as well. SOUNDBITE: BOB SHANKS, CHIEF FINANCIAL OFFICER, FORD (ENGLISH) SAYING: "We've got four plants right now that are under construction in China: two assembly plants, a transmission plant and an engine plant. So we still need more capacity. And we're in the process of putting that in place." Ford is bullish down the road, upping its outlook for the year. It now expects pretax profit to equal or exceed last year's $8 billion. The solid performance lifted Ford's stock, which has risen more than 30 percent this year, beating archrival GM's 27 percent gain. One more sign things are turning up at Ford: employees are fighting for office space at its headquarters, and they'll soon have to fight more: Ford plans to hire 3,000 salaried workers this year.