Ford drives out of gloom

MICHIGAN - Ford earned US$2.1 billion ($3 billion) in the first quarter as the economic clouds parted and consumers grew confident enough to buy cars again.

But the confidence didn't extend to investors, who pushed Ford's shares down yesterday on concerns that the carmaker's recovery isn't sustainable.

The profit of US50c per share was Ford's fourth straight positive quarter. It's an about-face from the same period last year, when Ford lost US$1.4 billion, or US60c per share, at the height of the recession.

Ford said it expects to be solidly profitable this year, a year earlier than its previous guidance.

But investors worried that the company can't maintain its strong gains in the second half of the year. Ford's first-quarter US market share made its biggest jump in 33 years, for example, and is unlikely to keep growing at that pace.

Ford also faces higher prices for steel and other raw materials, rising interest rates and expected weaker European demand.

Ford shares fell US89c, or more than 6 per cent, to close at US$13.57.

Gimme Credit analyst Shelly Lombard said Ford was dragged down with the rest of the market after Standard & Poor's downgraded debt held by Portugal and Greece. But he said Wall St is concerned Ford can't keep up the pace of its recovery.

Ford paid off US$3 billion in debt at the beginning of this month.

- AP