Auto-part maker Lear Corp. (NYSE: LEA) is up more than 20% after announcing surprising first quarter results. The Michigan-based company defied the weak economy by posting a 57% increase in profit from a year earlier while reaffirming its full-year earnings outlook.

Not ignoring the slow U.S. automarket, Lear Chariman, CEO and President Bob Rossiter said, ""Although we are facing significant challenges in North America, Lear's underlying operating fundamentals remain strong."

The world's largest automotive seat maker reported profits of 64 cents per share compared to expected earnings of only 48 cents per share. Though revenue fell, it still managed to beat expectations.

Most importantly, Lear raised its 2008 revenue projections from $15 billion to $15.5 billion - showing that the company can persevere through a possible vehicle sales downturn. The optimistic first quarter report led to a slew of analyst upgrades of the company's stock to "buy" and "outperform." For the time being, it seems like Lear is immune to the bigger problems facing the U.S. automotive sector.

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BP (NYSE: BP) and Royal Dutch Shell (NYSE: RDS) posted record earnings once again after rising oil prices bolstered profits at the two large gas companies. BP reported a 63% jump in its first quarter net income while Shell announced a 25% increase in its profits. Both companies attributed the better-than-expected profits to higher oil prices that beat expectations across the board. And the news only gets better as oil continues to head higher.

Companies like BP and Shell make money by selling gasoline and crude oil to consumers and companies. Since their profit margins remain the same as a percentage of sales, their net income has increased along with the higher dollar volume spent at the pump. For example, assuming the company makes 20% profit on its sales, a consumer will pay $0.20 for $1/gallon prices but $1 for $5/gallon prices. As you can see, the sharp rise in gas prices sparked a sharp rise in net income.

Oil prices set a new record $119.93 in New York yesterday before profit-taking ensued today. These prices have remained pressured amid an uptick in militant attacks in Nigeria, however. The Movement for the Emancipation of the Niger Delta has stepped up its attacks on pipelines recently in an attempt to reduce the nation's crude exports. However, overall output came in higher-than-expected at 3.52 million barrels a day compared to analyst estimates of 3.37 million per day. This news sent oil prices lower on the day, but prices are still expected to remain high.

ConocoPhilips and Cheveron are also expected to report better earnings this quarter on May 1st and 2nd, respectively.

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Billionaire activist investor Kirk Kerkorian is making waves Monday by announcing that his Tracinda Corp. not only has amassed 100 million shares of Ford Motor Company (NYSE: F), but that he is making an additional offer of $8.50 per share for another 20 million shares.

Worth more than $18 billion largely from plays in Las Vegas, Kerkorian nonetheless has a history of entangling himself with other Detroit automakers like General Motors Corp. (NYSE: GM) and Chrysler. This announcement is a signal that he has faith in the turnaround efforts of Ford CEO Alan Mulally.

With the purchase of an additional 20 million shares, Kerkorian would have more than a 5% stake in Ford, a company still dominated by family interests. Despite going public in 1956, the descendants of Henry Ford still control 40% of the voting rights in the company - and given their track record, this almost definitively rules out and acquisition. This is important because such a rapid accumulation of shares by an outsider is often a build-up to a take-over attempt.

Kerkorian's logic in building such a large stake in Ford remain somewhat mysterious. Though the company reported a surprising first quarter profit, it still expects to lose money overall in 2008. Ford's truck and SUV-dependent lineup continue to be a huge liability with record gas prices.

According to a release Kerkorian, though his company, said "Tracinda has been following Ford closely since the company released its fourth quarter 2007 results which indicated that Ford’s management was starting to achieve highly meaningful traction in its turnaround efforts. Last week this was reinforced by Ford's first quarter 2008 results, achieved despite the difficult U.S. economic environment. Tracinda believes that Ford management under the leadership of Chief Executive Officer Alan Mulally will continue to show significant improvements in its results going forward."

Whether Kerkorian proves to be right, only time will tell, but for now Ford faces an uphill battle.

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