Ford's margin down but optimism still strong

Ford says its earnings reflect a drop in overall U.S. automotive profits, primarily due to lower per-vehicle margins. Worldwide revenues rose to $36.4 billion from $33.8 billion a year earlier but worldwide vehicle sales dipped to 1,811,000 vs. 1,850,000 units. Ford's U.S market share, however, climbed to 26.2% in the quarter, up from 25%. In Europe, combined car and truck share was 12.2% vs. 11.9%. Lower production, investment in major product introductions and the continued effect of exchange rates most likely will dampen automotive returns into the second half of the year, says the No. 2 automaker. While the Federal Reserve Board's raising interest rates earlier this year may have flattened sales temporarily, it will result in an extended cycle of economic growth, says David N. McCammon, Ford's vice president-finance. "Going forward, low interest rates and low inflation should help keep the economy on track," he says.