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Ford’s second quarter profit rises

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Ford’s second quarter profit rises

Although the No.2 US automaker is in the middle of a huge product offensive, a move that usually strains earnings, the company surprisingly posted a strong second-quarter profit.

Analysts, baffled by their predictions that were exceeded by the financial status of the company, retaliate and forecast there will be no more positive results for the year – as Ford is increasing its investments to bring 23 new models on the market and continues to restructure its loss-making European unit.

According to a company statement, Ford had in the quarter a net income of $1.3 billion, or 32 cents a share – which compares to $1.23 billion, or 30 cents, for the same period last year. The positive result was supported by the first quarter profit in the last three years in Europe, a record in North America and very strong sales in China. Without one-time costs, second-quarter profit was 40 cents a share – exceeding most analysts’ predictions.

“Forty cents in the second quarter is as good as it’s going to get,” said Adam Jonas, an analyst with Morgan Stanley with an “overweight” rating on Ford. “Despite the volume being down, they had a great cost performance. But ultimately, revenue still drives the day.”

“What we’ve got is a balancing act right now and it all just worked to give us the fantastic results we had in the quarter,” added Ford’s Chief Financial Officer Bob Shanks. “But clearly, we’re investing right across all parts of our business for the long term.”

Ford will have a tougher third quarter, as it races to introduce a new generation of the best-selling F-150, idling one of the two plants that produce the model, as it retools to build the new aluminum bodied version.

by Aurel Niculescu (my Google+) - Friday, July 25th, 2014 - filed under Ford, Industry, News. Image credit: .
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