Ford Motor Company released first quarter results yesterday, posting profits of $2.1 billion.  CEO Alan Mulally predicted a “solid” year for the Detroit-based automaker, though CFO Lewis Booth warned of several challenges ahead.

“We’ve got a lot of new product launches, so you’ll see some launch expense and we do expect some headwinds from commodities,” he said.  Reminding reporters of the still fragile economy, Booth cautioned that the company will likely post more modest profits for the rest of the year.

The CFO’s comments are a reminder that although the car market is showing signs of improvement, the industry isn’t out of the woods yet.

Nonetheless, strong sales of the F-150 pickup truck and Fusion midsize sedan have encouraged Ford to charge ahead with a second quarter production plan that is five percent higher than the plan it released at the beginning of March.  The much-anticipated Fiesta subcompact will go on sale next month and the next-generation Focus compact will launch in early 2011, completing Ford’s dramatically-overhauled lineup.

“The most important thing Ford has done is invest heavily in new product during this down cycle,” noted Erich Merkle, president of Autoconomy LLC. “As we’re coming out, they’ve got all this new product coming out in just about every category.”

Mulally famously maxed out all of Ford’s credit lines in 2006 to finance a massive restructuring of the company.  The $23 billion it borrowed gave the automaker a cushion to develop new models and withstand losses during the recession.  Ford was the only domestic automaker to avoid a government bailout, though the debt load now puts the company at a competitive disadvantage to rivals, GM and Chrysler, who had their slates wiped clean in bankruptcy.

The lack of government intervention may be helping Ford from the standpoint of consumer sentiment, though.  The company’s market share is up to 17.4 percent from 14.7 percent a year ago, the largest rise since 1977.  Ford also notes that many new customers have defected from Toyota following the Japanese company’s global recall scandal.

“The landscape might become more competitive as Toyota fights its way back and GM launches a lot of new products,” notes Joe Phillippi of AutoTrends Consulting.  In line with Booth’s projections, he warns,“The first quarter could turn out to be their best.”