story first appeared on usatoday.com
Ford reported a third-quarter net income of $1.6 billion, driven by its best-ever quarter in North America.
Pretax profits of $2.3 billion in North America more than made up for a $468 million pretax loss in Europe, but the drag left the net results down 1% from the quarter a year ago.
Revenue was $32.1 billion for the quarter, down 3% from a year ago, and operating profit was $2.2 billion.
While Ford remains very dependent on North America, the company said it reported a profit in Asia and Africa, and remained in the black in South America.
Ford this month had said its losses in Europe this year could exceed $1.5 billion -- up from a $1 billion forecast that surprised analysts in July. Some of the additional loss is related to costs to its plan also announced this month to shutter three operations in the U.K. and Belgium, starting next year. Ford is cutting 5,700 jobs in addition to offering 500 salaried buyouts.
It could take automakers years to right themselves in financially troubled Europe, and the costs will be staggering. Art Wheaton, auto expert at Cornell University's Industrial and Labor Relations School thinks it will cost Ford $1 billion to close those plants.
Wheaton says because of tough actions sooner instead of later, Ford will come out on top in Europe.
The U.K. plants close next year, and Ford plans to shut Belgium in 2014.
The earnings per share of 40 cents beat Wall Street expectations of 30 cents, and surpassed 34 cents a year ago.
The company narrowed its guidance for U.S. auto sales this year to 14.7 million. Until now, Ford gave a range of 14.5 million to 15 million.
As expected, the results were stronger than the second quarter when Ford reported a 57% drop in earnings of $1.04 billion with losses in Europe that reached $404 million. Pretax earnings were $1.8 billion.
South America saw modest operating income of $9 million, below a year ago.
In Asia-Pacific and Africa where Ford is investing heavily to get a bigger foothold in the market, especially China, the automaker had a $45 million pretax profit compared with a $43 million loss a year ago.
Ford's shift to smaller cars should get credit for much of Ford's success, says Jesse Toprak, senior analyst at TrueCar.com. He says North American sales indicate improved profitability for the company.
On Monday, Chrysler reported a third-quarter profit of $381 million, up 80% from a year ago.
General Motors is scheduled to report its earnings Wednesday.
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