Ford reports $1.3B net for Q3, raises guidance

Updated noon ET with reaction, regional details and share price.

Ford Motor reports it racked up strong profits in the third quarter, driven by continued strength in North America and smaller operating losses in Europe.

Net income was $1.3 billion, or 31 cents a share, in the quarter, which was down $359 million, or 41 cents a share, from the quarter a year ago.

But excluding one-time charges of $498 million -- primarily costs for European restructuring and for Ford's lump-sum pension buyout program -- Ford had pre-tax earnings of $2.6 billion, or 45 cents a share. That handily beat analysts' consensus expectations of 38 cents.

Ford shares were up 24 cents, or 1.37%,at $ 17.76 in midday trading.

Ford also raised it full-year guidance, saying it now it expects its full-year pre-tax profit to beat 2012, up from "equal to or higher." Significantly, it also said it now expects its automotive operating margins to be higher than last year, up from "about equal."

"After a strong start to the year, Ford showed no signs of slowing down in the third quarter with a 10% improvement in sales volume coupled with a more than respectable 2% bump in transaction prices," said Alec Gutierrez, senior analyst at Kelley Blue Book.

The company said it was profitable in all regions except Europe, where it cut losses nearly in half.

"North America continues to achieve strong profits and we saw significantly improved results outside North America," said Bob Shanks, Ford's chief financial officer, in a statement. "We substantially reduced our losses in Europe, set a record third quarter profit in Asia Pacific Africa and saw a $150 million improvement in South America."

Results by region:

• North America. Ford generated a $2.3-billion quarterly profit with an operating margin of 10.6%, down from 12% a year earlier. Ford raised its third-quarter U.S. market share from 14.9%, up slightly.

Ford's F-Series trucks "really gained traction year-to-date over rivals GM and ! Chrysler as Ford continues to widen market share lead," said David Kudla, CEO of Mainstay Capital Management.

"This is especially critical for a product line that accounts for the majority of the company's earnings in North America," Kudla said. "Other successful product standouts are the Fusion and Fiesta, both up sharply in year-over-year sales."

• Europe.

Ford more than halved its loss from $468 million a year earlier to $228 million and gained market share. The automaker is now expecting to lose less than the $1.8 billion in the region for the year.

"We believe Europe has reached a level of stability," said CFO Shanks. "We are seeing evidence and signs where we will start to see modest growth take hold over the near term."

Asia Pacific Africa. It was the best quarter ever for this Ford division, with earnings of $126 million before taxes, up from $45 million a year earlier. The unit includes China, where Ford says its market share rose eight tenths of a percentage point from a year ago to equal last quarter's 4.3%. b

• South America. New products drove earnings of $159 million before taxes, up from just $9 million in the quarter a year ago.

Ford said it contributed $1.1 billion in the quarter to its funded pension plans worldwide, including about $700 million to its U.S. plans, as it continues its plan to cut its pension risks.