FoMoCo surprised the industry and Wall Street today with the announcement of a $100 million profit for the first quarter of 2008, an improvement of $382 million from a year ago. The profit was due to strong European and South American sales which helped offeset the impact of sluggish U.S. sales.

Ford’s first quarter pre-tax operating profit, excluding special items, was $736 million, up $669 million from a year ago.  On an after-tax basis, Ford’s first quarter operating profit from continuing operations, was $525 million, compared with a loss of $172 million in the same period a year ago.

Ford posted strong profits of $739 million in Ford Europe and $257 million in Ford South America. Ford North America improved by nearly $600 million from year-ago levels.

“The remainder of 2008 will be a challenge but we are cautiously optimistic despite the external challenges,” CEO Alan Mulally said. “Our plan is working.”

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