Ford narrows loss to 380 million dollars

CHICAGO (AFP) - Ford Motor Co. said Thursday its losses narrowed in the third quarter to 380 million dollars as the struggling auto giant cited progress in its turnaround effort.

The results marked a sharp improvement from a massive 5.2-billion-dollar loss in the same period a year ago.

While costs were down by 600 million dollars for the quarter as Ford shuttered factories in the face of a steady loss of market share, revenue also rose in the latest three months to 41.1 billion dollars from 37.1 billion a year ago.

The number-two US automaker attributed the revenue rise to higher pricing, an improved product mix and changes in currency exchange rates.

"Our third-quarter performance is very encouraging," said Ford president and chief executive Alan Mulally.

"We can see our plan taking hold with significant improvement continuing in our core automotive operations," he said.

"We remain committed to executing the four priorities of our plan -- restructuring the business to operate profitably, accelerating the development of new products that our customers want and value, funding our plan and improving our balance sheet, and working even more effectively together as one Ford team, leveraging our global assets."

The latest results translated to a loss of 19 cents a share, but excluding one-time items was a loss of just one cent, compared with analyst forecasts of a 47-cent per share deficit.

Ford shares were up 1.96 percent at 8.40 dollars in morning trade.

The Dearborn, Michigan-based company is in the midst of a sweeping restructuring, having lost market share every year since 1995 and posted a loss of 12.6 billion dollars last year.

Mulally said Ford was on track to return to profitability "in 2009 and beyond," as outlined in its "Way Forward" restructuring plan, and expects the automaker to approach the break-even point this year on a pre-tax basis.

Ford is also accelerating its cost-cutting plans and expects to achieve its targeted five-billion-dollar annual operating cost reduction in 2008 instead of in 2009 as previously planned, he said.

"We are very confident we'll achieve these cost reductions across all the activities," he said in a conference call.

Meanwhile, Ford is selling off parts of the automotive empire, having sold Aston Martin for 931 million dollars earlier this year.

It is also currently studying bids for its Jaguar and Land Rover units and expects to complete the deals "no later than early next year."

A sale of Volvo has not been ruled out, Mulally indicated.

"Our plan now is to not sell it and to focus on (improving) the cost structure," he said. "It's what we've decided now as our focus but we will continue to review the portfolio on a continuous basis."

Ford also expects "significant" long-term cost savings as a result of a landmark contract negotiated with its main union.

While Ford will not comment on the deal until it is ratified by the United Auto Workers, Mulally said: "It really is going to significantly improve our competitiveness going forward."

The latest quarter included 350 million dollars in charges, including for restructuring.

Globally, automotive operations produced a pre-tax loss of 362 million dollars for Ford on revenues of 36.3 billion dollars.

Ford North America showed a loss of one billion dollars, while the South American operations resulted in a profit of 386 million.

Ford Europe had a loss of 13 million dollars as its Premier Automotive Group, including Land Rover and Jaguar, lost 97 million dollars. In Asia, Ford reported a profit of 30 million dollars.

It also reported a profit of 18 million dollars from its investment in Japanese automaker Mazda, down from 40 million a year ago.