Ford profit surges as big vehicles soar

The second largest U.S. automaker posted second-quarter earnings of 47 cents per share, up from 40 cents a share in the year-earlier period.

Ford shares were up 2.13% to $14.89 in pre-market trading in New York on Tuesday.

Ford also maintained a forecast of North American profit margin between 8.5 percent and 9.5 percent.

Detroit’s finances are strengthening as quadrennial labor talks with the United Auto Workers union kick off. UAW officials aim to replace a contract expiring in mid-September with a more generous deal for its members; domestic auto makers are likely to point to their combined first-half profits of $9 billion in North America as reason to stick to a profit-sharing model. The truck is selling for $44 100 on average, the highest transaction price in the full-size pickup segment, according to Erich Merkle, Ford’s sales analyst. Ford’s North American profit margin was 11.1% for the second quarter, down from 11.6% in the year-earlier quarter. Shanks said Ford sees China sales of 30 million by the end of the decade. But Ford managed to reduce its loss for the quarter to $185 million from $295 million a year ago, CFO Bob Shanks said in an interview that Ford was able to boost its pricing to offset local inflation, which in turn helped offset somewhat higher costs and lower sales volumes. Notably, the significant jump in profit came as overall revenue actually slid slightly to $37.3 billion.

Ford’s shares have fallen 6.1 percent this year to close Monday at $14.55, valuing the Dearborn, Michigan-based company at $57.8 billion. It now expects sales to flat or down for the entire industry this year.

Ford’s Asia Pacific region, which includes its fast-growing China operation, earned $192 million for the quarter, an increase of $33 million. Sales in China in 2014 were about 24 million.

“As this has been happening, we have been adjusting our production all along” due to the lower demand, said Shanks.