Debt reduction pushes Ford to $2.3B 2Q profit

[July 23, 2009]  DEARBORN, Mich. (AP) -- Ford Motor Co. posted a surprise second-quarter profit of $2.8 billion Thursday, due to income related to a reduction of debt.

The nation's second-largest automaker said it earned 69 cents a share, compared with a loss of $8.7 billion, or $3.89 a share, for the same quarter a year ago. That quarter was the worst in Ford's history.

Excluding special items, including the debt reduction, Dearborn, Mich.-based Ford would have lost $424 million, or 21 cents a share, far surpassing analysts' expectations. Analysts polled Thomson Reuters expected a per share loss of 50 cents on revenue of $24.7 billion.

Excluding special items the company lost just over $1 billion in the second quarter of last year.

The second-quarter profit came because of a $3.4 billion gain due to debt reduction. In March Ford swapped stock and cash to reduce its loan and bond debt by $7.7 billion. The company has reduced its debt by $10.1 billion this year, and is likely to take additional action this year to further cut debt and raise cash.

Ford spent $1 billion more in cash than it earned in the quarter, compared to $1.4 billion in the first quarter of 2009.

Revenue was $27.2 billion, $11 billion less than the comparable quarter a year ago.

Shares of the company rose 29, for 4.6 percent, to $6.67 in pre-market trade.

[Associated Press; By KIMBERLY S. JOHNSON and TOM KRISHER]

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