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Ford 2Q net profit up 6 percent to $1.3 billion

By WTOP Staff

DEE-ANN DURBIN
AP Auto Writer

DEARBORN, Mich. (AP) — Ford Motor Co. beat Wall Street’s expectations in the second quarter as it chalked up a record profit in North America and made money in Europe for the first time in three years.

But things will get leaner in the second half as Ford closes one of its U.S. pickup truck plants to prepare for the launch of its new aluminum-sided F-150. Marketing expenses for new products, like the truck and the Ford Edge in the U.S. and the Mondeo and Focus sedans in Europe, will also take a bite out of earnings.

Ford, which earned $3.9 billion before taxes in the first half of this year, confirmed it expects full-year earnings of $7 billion to $8 billion. That’s down from $8.6 billion in 2013.

“It’s really a set-up year for a step up in the business in 2015 and beyond,”Chief Financial Officer Bob Shanks told media Thursday morning at Ford’s Dearborn headquarters.

For the April-June period, Ford’s net income rose 6 percent to $1.3 billion. The profit, of 32 cents per share, was up from 30 cents per share in the same period a year ago.

Excluding separation costs in Europe and a $329 million impairment charge for its money-losing joint venture in Russia, Ford earned 40 cents per share. That beat analysts’ forecast of 36 cents, according to FactSet.

Ford’s revenue fell 1 percent to $37.4 billion, but topped analysts’ expectation of $36.2 billion.

Ford shares crossed $18 for the first time since early 2011 in morning trading, and were up 20 cents to $17.98 at midday.

Mark Fields, a company veteran who became Ford’s CEO on July 1, told analysts and media on a conference call that he intends to continue the strategy he helped develop with former CEO Alan Mulally. That means focusing on profitable growth, working closely between regions and speeding up vehicle development time.

“My message to our team internally, and now externally, is one of continuity but also acceleration of the plan,” Fields said.

The results were less rosy at Ford’s crosstown rival, General Motors Co., which posted a net profit of $190 million after absorbing $1.5 billion in recall-related costs. GM’s shares fell nearly 4 percent to $35.96 in midday trading.

Ford’s worldwide sales fell 1 percent to nearly 1.7 million. Sales were down in every region except Asia Pacific, where they jumped 21 percent thanks to strong demand for new vehicles like the Kuga SUV in China. Ford made up for that by limiting production and commanding higher prices.

Ford reported its highest-ever pretax profit of $2.4 billion in North America. The company’s U.S. sales fell, but Shanks said that was offset by lower costs for materials such as steel and increases in sales of parts and accessories.

Ford plans to close its Dearborn truck plant for eight weeks beginning in August. The new F-150, with aluminum sides that shave 700 pounds off the truck’s weight, is scheduled to go on sale in the fourth quarter.

In Europe, Ford made $14 million, its first quarterly profit since 2011. Ford expects Europe to be profitable for the full year in 2015.

In Asia, Ford’s profit jumped 22 percent to $159 million. Ford said its market share in the Asia Pacific region hit a record 3.7 percent.

Ford lost $295 million in South America, where its sales were down 23 percent.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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