Ford has surprise: carmaker has profit

Ford Motor on Thursday posted a surprise profit of $2.26 billion for the second quarter, ending a streak of four straight quarterly losses.

In recent months, the carmaker has claimed market share from its American rivals, General Motors and Chrysler, while these struggled to restructure their operations in bankruptcy court.

Ford executives now say the automaker is on track to return to annual profitability in 2011.

"Despite the challenges, Ford's underlying business is getting progressively stronger as we launch great new products the customers want and value, while continuing to aggressively restructure our operations," Ford chief executive Alan R. Mulally said in a conference call with analysts.

Ford's gains were aided by rapid cost-cutting in the second quarter. Ford reduced its debt obligations by $10.1 billion, which will save the company more than $500 million a year in interest expense. It raised $1.6 billion by issuing common stock. The company said it also cut "structural" costs by $1.8 billion, in part by eliminating 1,000 U.S. hourly jobs through buyouts.

Ford said it is likely to make additional moves to raise cash and reduce debt. It is still looking for a buyer for its Swedish unit Volvo, which lost $231 million in the quarter.

Excluding special items, such as debt reduction, Ford would have lost $424 million in the second quarter. In comparison, the company lost $8.7 billion in the second quarter of 2008.

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