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Ford’s focus has delivered a different kind of pick-up: a surprise quarterly profit. Investors, expecting a loss, pushed the stock up 16 per cent to about $8.80. Besides some short covering, the jump reflected hopes that the promised turnround is gaining momentum.

Such hopes are justified up to a point but the reaction looks overdone. Ford similarly surprised a cautious market in the second quarter of 2007, pushing the stock to almost $10. It then began a long slide down to almost $5 last month as evidence of a US slowdown mounted.

Being mindful of past disappointments is not to dismiss Ford’s achievements. The carmaker has slashed costs in North America. In Europe, it turned in an unheard-of 7 per cent pre-tax margin. Mixed in with the improvements were some gains that look less sustainable, such as favourable commodities hedges. Soaring spot steel prices should feed into Ford’s supply contracts later on. Sensibly, Ford was upfront about the likelihood that the first quarter’s pace of improvement would probably not be sustained through the rest of 2008.

Ford expects the industry to sell up to 15.6m vehicles this year. Vehicle sales, however, tend to correlate closely with home sales, which are still falling. Some analysts forecast that Americans will buy fewer than 15m vehicles in 2008. Next week’s release of April sales data will provide crucial clues. In the meantime, a slump in profits at Ford’s credit business highlights the plight of the consumer.

The progress in shrinking the North American business is to be applauded. Getting back to sustainable profitability, however, demands progress on more challenging fronts, not least turning a profit on smaller cars in a truck-loving market. Investors bidding Ford’s shares up to a multiple of 2010 earnings of 8.5 times – against General Motors’ 5 times – should ease off the gas.

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