Ford surprises Wall Street with $750 million second-quarter earning, first profit in 2 years

DEARBORN, Mich. — Job cuts, slimmer losses in North America and good sales overseas helped Ford Motor Co. post surprise second-quarter earnings Thursday of $750 million, its first profitable quarter in two years.

The company also confirmed it is exploring the sale of its Jaguar and Land Rover subsidiaries and said its U.S. market share rose during the quarter.

Despite that, Ford's president and chief executive Alan Mulally said investors should not think the automaker has turned the corner to consistent profitability.

"These accomplishments are something to be proud of, but we are not ready to declare victory," Mulally said, predicting substantial losses in the third and fourth quarters.

Ford's second-quarter profit of 31 cents per share compares with a net loss of $317 million, or 17 cents per share, in the same quarter of last year.

The company attributed the gains to significant year-over-year improvement in all of its automotive operations, and to cost cuts due to restructuring and positive special items that totaled $443 million. That includes a $206 million gain related to sale of its Aston Martin unit. Even its struggling North American division showed progress.

Ford has shed 27,000 hourly and about 10,000 salaried jobs since September 2006 through early retirement and buyout offers as it tries to shrink itself to match lower demand for its cars and trucks.

The positive earnings, though, surprised 15 analysts polled by Thomson Financial who expected the company to lose 35 cents per share excluding special items.

Ford shares gained 14 cents, or about 1.8 percent, to $8.11 in early trading Thursday after the earnings news.

Ford said it is exploring the potential sale of Jaguar and Land Rover based on discussions with parties that have expressed interest in the British units. And the company said it is conducting a strategic review of Volvo "that likely will conclude prior to year end."

Despite the quarterly earnings, the company said it still doesn't expect to post an annual profit until 2009, although it is burning cash at a slower rate than the slightly less than $17 billion through 2009 that the company had predicted.

Even without the positive special items, the company still made money in the quarter, posting a profit of $258 million, or 13 cents per share. That compares with a loss of $118 million, or 6 cents per share, in the year-ago quarter.