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Ford first-quarter loss narrows

Automaker credits its restructuring efforts

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The Ford oval is seen on the wheel of a new vehicle. U.S. sales of new vehicles fell more than 13 percent for quarter.

The Ford oval is seen on the wheel of a new vehicle. U.S. sales of new vehicles fell more than 13 percent for quarter.

Ben Margot, Associated Press

DEARBORN, Mich. — At $282 million, Ford Motor Co.'s first-quarter loss was much improved over the $1.4 billion in red ink it posted during the same quarter last year.

Company officials touted the results as a sign that its restructuring plans were taking hold, but Ford still is struggling to make money on its core business — selling cars and trucks in North America.

The first-quarter loss, announced Thursday, was Ford's seventh consecutive negative quarter, but the automaker said the smaller deficit reflected its efforts aimed at cutting costs and rolling out new products to compete with Asian automakers.

Ford's revenue rose 5 percent, and its loss, excluding special items, was smaller than Wall Street expected.

CEO Alan Mulally said in a conference call with reporters and industry analysts that Ford was making progress.

"Although these first-quarter results are encouraging, we still have a long way to go to turn around this business," he said.

"The basics of our business are improving."

Ford's new vehicle sales in the United States fell more than 13 percent for the quarter, and its market share dropped from 17.2 percent in the first quarter of 2006 to 15.1 percent.

The Ford Edge and Lincoln MKX crossover vehicles were performing well, but sales fell in the company's flagship F-Series pickup truck line and its Explorer sport utility vehicle. Both had been huge profit centers for the company in the past.

The overall loss of 15 cents per share for the January-March period compared with 76 cents per share in the same period a year ago.

Revenue rose to $43 billion from $40.8 billion a year ago.

Several industry analysts reacted to Ford's improvement with caution, saying that the company still faces significant challenges for the remainder of the year.

"Nothing there has really changed our feelings that 2007 will be a year of tremendous cash losses," said Gregg Lemos-Stein, a credit analyst for Standard & Poor's in New York.

Although Ford's cash flow improved in the first quarter, it is still on track to burn up $17 billion through 2009 to cover losses and restructuring costs, Chief Financial Officer Don Leclair said.

"I think the quarter represented a high point" for the year, said David Healy, an analyst with Burnham Securities.

Although the new crossovers and heavy-duty pickup trucks are off to a good start, Healy attributed Ford's sales decline to its plan to reduce low-profit sales to rental car companies and to sluggish sales of its older models.

Without special items, primarily restructuring costs, Ford said it would have lost $171 million, or 9 cents per share, in the latest quarter compared with an operating profit of $223 million, or 12 cents per share, a year ago.

The loss excluding special items was far less than the loss of 60 cents per share consensus forecast by 16 analysts polled by Thomson Financial. The estimate typically excludes special items.

Ford shares rose 32 cents, or 4.1 percent, to close at $8.20 on the New York Stock Exchange. They have traded in a 52-week range of $6.06 to $9.48.