(July 25, 2012) DEARBORN, Mich. — Ford, pulled down by widening losses in Europe, reported today that its profits fell sharply in the second quarter. Net income declined 57 percent to $1.04 billion, from $2.40 billion a year earlier, as revenues dropped $2.2 billion to $33.3 billion.

North America continued to be Ford's profit driver. North American pre-tax profits were $2 billion, up from $1.9 billion a year earlier.

Despite the sour sales in Europe, Ford recorded its 12th consecutive quarterly pre-tax operating profit.The company reported a pre-tax operating profit of $1.8 billion, or 30 cents per share, and net income of $1 billion, or 26 cents per share. The company also continued to generate positive Automotive operating-related cash flow, and ended the period with a strong liquidity position of $33.9 billion, an increase of $1 billion during the quarter.

“The Ford team delivered another solid quarter driven by the strength of Ford North America and Ford Credit,” said Alan Mulally, Ford president and chief executive officer. “We remain absolutely committed to continuing to make progress on our One Ford plan, including dealing decisively with near-term challenges, investing for future growth, and developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value.”

Ford finished the second quarter with Automotive gross cash of $23.7 billion, an increase of $700 million during the quarter. Automotive debt of $14.2 billion at the end of the second quarter was up from $13.7 billion at the end of the first quarter, primarily reflecting additional drawdowns of low-cost loans for the development of advanced vehicle technologies. The company will make its last draw on these loans by August 2012, and repayment of the loans begins in September 2012.

Ford also made payments of $800 million to its worldwide funded pension plans, of which $500 million were discretionary payments to U.S. funded plans, in line with the company’s previously disclosed long-term strategy to de-risk its funded pension plans. Dividends paid in the quarter totaled nearly $200 million.  Automotive gross cash exceeded debt by $9.5 billion at the end of the second quarter, a net cash increase of $200 million during the quarter.