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Ford Motor Company (F)’s Q2 Earnings Blow Past Estimates

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CEO Alan Mulally who helped turn the American icon Ford. Photo Courtesy of Ford.

Ford Motor Company (NYSE:F) has made many investors happy this morning by hitting just about every positive note possible in its Q2 earnings report. It’s just a continuation of the great turnaround story witnessed at the Blue Oval since CEO Alan Mulally took over in 2006. Ford beat analyst expectations on both pre-tax EPS and revenues. In addition to that, Ford Motor Company (NYSE:F) also narrowed its loss in Europe significantly and improved drastically in China and South America. Here are the details.

By the numbers
Starting from the top-line revenue, Ford recognized a 15% increase to $38.1 billion, beating average estimates of a 12.5% increase to $35.23 billion.

Next, looking at Ford Motor Company (NYSE:F)’s pre-tax profits, the company posted its 16th consecutive quarter of profitability; at $2.6 billion, or $0.45 cents per share, it drastically beat the average estimate of $0.37 cents per share. If you’re comparing to numbers from a year ago, it’s an improvement of $0.15 cents per share – very significant.

Down to the bottom line, Ford reported a net income of $1.2 billion, or $0.30 cents per share, which is an increase of $0.04 cents per share or $193 million compared to a year ago.

As is usual with Ford, the main driver of its revenue and profits is North America, driven by multiple market factors such as improving transaction prices and increased sales with its redesigned models. Such factors have led both to Ford Motor Company (NYSE:F)’s best second quarter and first half profit in North America.

As always the F-Series, which is up 22% year to date, brought in huge profits; in combination with the Escape and Fusion, the truck model helped increase Ford Motor Company (NYSE:F)’s market share by 0.08% year to date. That’s a huge gain in an industry were a fraction of a point is drastic, and it is the largest increase of any full-line automaker.

Outside of the phenomenal results in North America, Ford Motor Company (NYSE:F)’s Q2 report shows much progress has been made overseas. The Asia-Pacific-Africa region had its best quarterly profit and Ford recognized a return to profitability in South America. Perhaps the best piece of news was a decline in losses in Europe, which are down from $404 billion a year ago to $348 billion. That’s also a $114 billion improvement from last quarter and it prompted Ford Motor Company (NYSE:F) to lower guidance on its yearly losses from $2 billion to $1.8 billion – an excellent development for investors.

CEO Alan Mulally summed it up perfectly in a press release to Ford investors:

Our strong second quarter with improved results in every region around the world is another proof point that our One Ford plan is continuing to deliver and is building momentum … We remain absolutely committed to our plan of serving customers in all markets with a full family of vehicles offering the very best quality, fuel efficiency, safety, smart design and value. As we do, we are providing profitable growth for everyone associated with Ford.

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