Latest US industrial data confirms rosy forecasts

The Ford Motor Company narrowed its losses in the third quarter, while Coca-Cola improved earnings by 12 percent and Continental Airlines moved back into profit, fuelling growing optimism about the prospects for corporate America.

The latest economic data yesterday added to the picture. US industrial production rose last month by its biggest gain since April 2000, while the number of Americans filing an initial claim for jobless benefits fell last week to the lowest level since early February.

Ford raised its full year forecast. The company reported a loss of US$25 million, compared with a deficit of US$326 million a year ago. Excluding a charge taken for an accounting change, the car-maker would have reported profits of US$237 million.

But it warned that it would take a further US$600 million in restructuring charges at its struggling European operation. The costs will cover previously announced plans to cut a further 6,700 jobs including 500 in Britain, 3,000 workers at its plant in Genk, Belgium and 1,700 at its German business.

Ford Europe executives have vowed to move into profit in the fourth quarter but the company admitted it could still be mired in losses of up to US$30 million.

The story at Ford was similar to that of rival General Motors this week. In both cases a strong performance from the finance arm offset a slide in automotive earnings due to curtailed production and the price war in the US.

At Ford Credit, the company's consumer finance division, profits reached US$504 million, compared with US$294 million. Ford's automotive unit lost US$609 million.

Worldwide automotive revenue during the quarter fell 6.5 percent to US$30.3 billion as vehicle sales slipped to 1.41 million from 1.66 million a year earlier.

Continental Airlines was the first US carrier to edge back into profitability without the benefit of government assistance. The company made a profit of US$133 million, including a US$100 million gain from its sale of shares in the firm ExpressJet.

Revenues rose 8.6 percent to US$2.37 billion on the back of a pick-up in summer traffic after the turmoil wrought by terrorism and the pneumonia-like illness SARS.

Coca-Cola posted profits of US$1.22 billion against US$1.09 billion in the same quarter a year earlier.