Ford backs out of the red

Ford Motor Company yesterday said its turnaround plan was on track as it reported a first quarter profit of $896m, reversing a $1.1bn loss for the corresponding period a year ago.

The better performance was the result of an aggressive cost cutting plan put in place by Bill Ford Jr, a scion of the company founder's family.

The car maker did little to encourage any belief that the broader economy has begun to improve. Ford lowered Wall Street estimates for the second quarter and said it was sticking by its plan to pare back production in North America by 17%.

"The US economy is certainly continuing to feel the effects of the geopolitical uncertainty we have faced over the last several months," said Allan Gilmour, Ford's chief financial officer.

Some of the biggest names in corporate America, including General Motors and Microsoft, have damped thoughts of any imminent recovery this week, and Coca-Cola did the same yesterday. The soft-drinks group also swung back into profit during the first quarter, of $835m, but said sales were sluggish as fewer people visited restaurants or stayed in hotels.

Ford has accelerated its cost-cutting plan to meet its target of $7bn in annual profits by mid-decade. Mr Ford said the improving profitability was evidence that the actions "are making a difference".