Ford announced its most rewarding first quarter since 1998, with $2.6 billion in earnings on global sales of $33.1 billion. The earnings are up 22 percent versus the first quarter of 2010, while sales increased by $5 billion for the quarter. This large increase in sales was the biggest driver for the overall profit, as the Dearborn, Michigan-based automaker moved 1.4 million units in Q1 2011, up 16 percent versus Q1 2010.

Most of Ford's profit came from moving vehicles here in North America, where $1.8 billion in total earnings were bolstered by improved sales and lower incentive spending. Ford also managed to eek out a $293 million profit in Europe, which posted a loss in the fourth quarter of, 2010. In all, Ford managed $2.8 billion in operating profit, and $2.1 billion of that money came from automotive operations. Ford Credit earned $713 million on the quarter.

Further good news comes on the debt front, as Ford managed to pay down its debt by $2.5 billion during Q1 while also increasing liquidity by $2.8 billion. That means Ford has a much larger cushion in the event the industry's economic situation once again takes a turn for the worse, while also paying less money in interest. Ford eliminated $1 billion in annual interest costs in 2010.

Ford's outstanding quarter took analysts by surprise, as the projections of a 50 cents-per-share profit was demolished by a 61 cents-per-share reality. As a result, Ford shares are up four percent in early Tuesday trading. Hit the jump to read Ford's official statement.


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