Ford Motor Co posted a higher-than-expected first-quarter profit on Wednesday as its North American unit posted its best quarter in more than a decade on the strength of new models.
Revenue in North America, the company's largest market, shot up by one-fifth during the quarter and Ford added that its European restructuring was on track.
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The second-largest U.S. automaker reported a pretax profit of $2.1 billion, or 41 cents per share for the quarter, down from about $2.3 billion a year earlier. But the results exceeded the analysts' average estimate of 37 cents per share, according to Thomson Reuters I/B/E/S.
The strong performance in North America was the result of "recovering vehicle demand in the U.S., lower wage costs, and factories that are running close to capacity," Edward Jones analyst Christian Mayes said in an email.
"A recovering housing market is also helping to spur demand for F-Series trucks, which carry higher profit margins than some of the smaller cars Ford sells," Mayes added.
Ford still expects to lose $2 billion in Europe this year. Chief Financial Officer Bob Shanks told reporters that recent economic data in the region painted a cloudy picture of when Europe would eventually rebound.
He added that automakers "seem to be running along the bottom now" in Europe. The industry may see some stabilization toward year-end or early 2014, he added.
Net income was $1.6 billion, or 40 cents per share, up from $1.4 billion a year earlier. Revenue rose to $35.8 billion from $32.4 billion.
Ford's pretax profit in North America reached its highest level since at least 2000, when it began reporting the region as a separate unit. The company posted a $2.4 billion profit there, with sales volume up 17 percent.
Ford posted a $462 million loss in Europe, reflecting higher costs and the economic downturn's impact on consumer demand for new cars and trucks. In South America, Ford lost $218 million due to unfavorable exchange rates, particularly in Venezuela.
In Asia Pacific/Africa, Ford earned $6 million. In China, Ford's market share was 3.6 percent in the first quarter.
Ford's shares were up 0.5 percent at $13.43 in trading before the market opened.
(Reporting by Deepa Seetharaman and Paul Lienert; Editing by Lisa Von Ahn and Maureen Bavdek)