Ford posts unexpected 1st qrtr profit, shares jump

By David Bailey and Soyoung Kim

DETROIT (Reuters) - Ford Motor Co posted an unexpected quarterly profit on Thursday, led by strong results in Europe and a sharply narrower loss in North America due to cost-cutting, sending its shares up more than 16 percent.

The automaker also cut its second quarter North American production plan and said it would offer more targeted buyouts to union workers at specific plants after getting about 4,200 workers to accept recent offers to leave the company.

Ford said it expects the rest of 2008 to be challenging. The company cut its full-year U.S. auto industry sales outlook due to the weakening economy and rising gasoline prices.

Ford said it remains committed to returning its auto business to profitability in 2009.

"Particularly impressive was the continued strength in Europe," Calyon Securities analyst Mark Warnsman said in a research note. "The outstanding result in Europe would have meant little, however, if North America had not pulled itself back to close to breakeven."

Ford reported net income of $100 million, or 5 cents per share, compared with a net loss of $282 million, or 15 cents per share, a year earlier. Revenue fell 8 percent to $39.4 billion excluding the Jaguar Land Rover unit Ford is selling to Tata Motors Ltd.

Ford expects to complete the Jaguar Land Rover sale by the end of the second quarter.

Ford reported a profit from continuing operations of $525 million, or 20 cents per share, excluding special items, while analysts on average expected Ford to report a loss of 14 cents per share on that basis, according to Reuters Estimates.