I’m sure you already familiar with this one model of car. Yes, the car brand Fordis the car that much-loved by consumers. An internet site wrote an article titled Ford Is Slowly Climbing Out Of Debt.
Ford Motor hocked everything, even the company’s famous logo, to avoid the kind of collapse that landed General Motors and Chrysler in bankruptcy. The downside is that now the company is buried in debt.
But if Ford keeps generating results like it did in the second quarter, that’ll be less of a problem.
Ford posted a $2.8 billion net profit for the period ended June 30, as it lured car buyers to pay higher prices for its newest models. It was Ford’s fifth straight profitable quarter. Revenues were $31.3 billion, up more than 30 % from the same period a year ago (excluding Volvo, which is about to be sold to China’s Geely Automotive).
For the first half, Ford’s pre-tax operating profit was $5 billion, a $7.5 billion improvement over the first half of 2009, when the industry was in a tailspin.
“We’re ahead of where we thought we’d be after the first half, and we expect even better results in 2011,” said Chief Executive Alan Mulally.
The best news, perhaps, was that Ford’s automotive operations generated $2.6 billion in cash in the quarter, and the company retired $7 billion worth of debt, lowering its annualized interest costs by $470 million. A year ago Ford burned through $1 billion in cash during the quarter.
Ford hit mid-year with $21.9 billion in cash and $27.3 million in automotive debt, leaving it with a net automotive debt of $5.4 billion. Ford said it expects to have more cash than debt by the end of 2011.
Although Ford’s debt is about three times bigger than General Motors, which scrubbed its balance sheet clean in bankruptcy, Ford has more operating momentum, said bond analyst Shelley Lombard of GimmeCredit. “If it can keep turning that momentum into cash, it should be able to reach its goal of zero net debt this year,” she said. “That means either they’re paying down debt, or they’re accumulating cash, and either one is a good thing.”
Ford is boosting profit by reducing discounts and selling new models like the Taurus sedan and Fiesta subcompact with more expensive features like Ford’s Sync voice-activated phone and stereo system. Buyers paid an average of $30,322 for Ford cars and trucks in the quarter, about $2,000 more than they did a year ago, according to automotive research firm Edmunds.com.