Ford’s second-quarter profits rise to $1.3 billion, a 6% increase

The European unit of Ford Motor eked out its first profit in three years in the second quarter, the company said Thursday, even as it warned that it would probably slip back into the red later this year in part because of slumping sales in Russia.

Its first quarterly profit in Europe in three years, record earnings in North America, and soaring sales in China powered Ford to net income of $1.3 billion, or 32 cents a share, compared with $1.23 billion, or 30 cents, a year earlier, according to a statement yesterday. Excluding one-time costs, second-quarter profit was 40 cents a share, beating the 36-cent average estimate of analysts.

And in a reminder of how difficult the European car market remains, General Motors reported Thursday that its loss on the Continent had widened to $300 million, compared with a loss of $100 million in the second quarter of 2013. For G.M. over all, profit slumped to $190 million from $1.2 billion a year earlier as it absorbed the cost of recalling models with a faulty ignition switch that has been tied to 13 deaths.

A sharp focus on cost cutting helped propel Ford’s North American operations to a pretax profit of $2.44 billion, even as revenue in the region declined. Europe also benefited from reductions in costs for materials to produce cars as the region earned $14 million in the second quarter. There will be pressure on profits in the second half of the year, though, Ford said, as it overhauls factories to roll out new models.

Ford’s chief executive, Mark Fields, said Thursday that he was “pleased by the response of our European consumers” and that the company expected to meet its European profit prediction for 2015. Ford said, however, that it expects to lose more than $180 million in Europe during the second half of the year. That is partly because it typically sells fewer cars in the summer but also because of the cost of introducing a new version of its high-end Mondeo model as well as a new version of the midsize Focus.

Ford also illustrated how tension between Ukraine and Russia is beginning to have an economic impact in Western Europe. Ford said that sales fell in Russia as well as Turkey during the second quarter, but that it has not given up on the market. “Although the current environment in Russia is difficult,” Ford said in a statement, “Russia remains a large and important market.” Read more about the story here.