Preview of Ford’s Earnings Report

From Bloomberg:

Ford probably earned a record $2.7 billion pretax profit in North America during the first three months of the year, according to analyst estimates at Morgan Stanley and JPMorgan Chase & Co. If those predictions hold up, the strong financial performance is largely thanks to a well-received lineup of new cars, led by the mid-size Fusion and compact Focus. And with renewed demand for pickups, the company has earned the biggest U.S. sales gain among top automakers in the quarter.

It’s early in the year and Ford faces numerous challenges, chief among them cratering demand in Europe, a weakening yen that’s giving Japanese automakers a boost in the U.S. and a poor showing in the luxury market. Still, Dearborn, Michigan-based Ford continues to impress with its ongoing reinvention of its cars and trucks.

“The double benefit of new product in the car segments and the very strong industry pickup demand created what seems like a picture-perfect quarter for Ford in North America,” Itay Michaeli, an analyst at Citigroup Inc. who recommends buying the shares, said by phone. “They’re really in a sweet spot.”

First quarter North American profit margin may have topped 12 percent, according to Morgan Stanley and JPMorgan. To stay there, Chief Executive Officer Alan Mulally needs to keep Ford’s vehicle lineup fresh as he strives to make further gains in the car and utility segments. That won’t be easy as a weakening yen gives Toyota Motor Corp. and Honda Motor Co. an edge.

Posted by on April 23rd, 2013 at 11:32 am


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