DETROIT – Ford Motor Co. (F) raised its earnings estimates for the second time this year Wednesday on lower-than-expected credit losses.
The second-largest U.S. automaker, which has been sacrificing lower-margin sales in a bid to improve profits, said it now expects earnings in the range of $1.65 to $1.75 per share this year compared with a previous estimate of $1.50 to $1.60 a share.
For the second quarter, Ford said it sees earnings before special items ranging from 45 to 50 cents per share, up from 30 cents to 35 cents previously.
"The increase primarily reflects the strong performance of the company's Financial Services Sector, which has benefited from lower than anticipated credit losses," the company said in a statement.
It also cited improved values for used vehicles and those coming off leases and continuing low interest rates as factors underpinning its quarterly performance. Higher used car values lift margins when vehicles coming off lease are sold in an auction.
Ford's first increase in its full-year profit forecast came after it posted first-quarter earnings that more than doubled to $1.95 billion, or 94 cents a share, far exceeding Wall Street estimates. The first-quarter results also beat those at rival General Motors Corp. (GM) for the first time in three years.
Ford, which has been backing away from low-margin fleet and daily-rental sales, said last month that it was on track to achieve a mid-decade target of $7 billion in annual pretax profits.
In its revised estimate Wednesday, Ford reiterated that it expects special items, from a European resturcuting and the sale of non-core businesses, to cut full-year earnings by 7 to 9 cents per share.
Analysts on an average expect Ford to earn $1.85 per share this year, according to Reuters Estimates (search).