Ford (F) Earnings Beat by $0.10 on Record North America Profit

Shares of the Ford Motor Company (F) were trading up +0.33 or +2.27 percent to $14.88 per share in Tuesday's premarket after the company announced earnings for its second quarter. Ford beat estimates by $0.10 per share in large part due to a record profit in North America. Ford stock closed at $14.55, up +0.16 or +1.11 percent in Monday's regular trading session.

Founded by Henry Ford in 1903, Dearborn, Michigan based Ford Motor Company is a multinational manufacturer of automobiles and the largest U.S. car maker.
Ford was the first company to manufacture automobiles on a large scale on moving assembly lines. The company sells cars under the Ford and Lincoln brands and owns 8 percent of UK automaker Aston Martin as well as 2 percent of Japanese Mazda and a 49 percent stake in Chinese company, Jiangling. Ford also owns Australian performance carmaker FPV and Brazilian SUV manufacturer, Troller.

Ford reported a pre-tax profit of $2.9 billion, up $269 million or +10 percent from 2014's second quarter. After tax earnings came to $0.47 versus $0.40 in the same period one year ago excluding special items charges from last year.

Net income came in at $1.9 billion, an increase of $574 million or +44 percent over 2014's second quarter. Revenue for the second quarter was $37.3 billion. Analysts were expecting the company to report earnings of $0.37 on revenue of $35.37 billion.

Mark Fields, Ford President and Chief Executive Officer said in the company's press release that, "We delivered an outstanding second quarter, a great first half of 2015, and we are confident the second half of the year will be even stronger. The entire Ford team is focused on accelerating our One Ford plan, delivering product excellence and driving innovation in every part of our business.

Ford reported its North America operating profit totaled $2.6 billion, on revenue of $23.3 billion, a record for the company in any quarter. Operating margin for the region declined by -50 bps to 11.1 percent. The company attributed the numbers to better pricing on new product launches of its new Ford Edge, Ford Explorer and the all-new MKX in North America, as well as the all new S-Max in Europe. The company also profited from strong demand for its F-150 pickup truck.

European revenue was $7.0 billion, down -14 percent in large part due to currency translation caused by the strong U.S. Dollar, while operating margin declined -40 bps to -0.2 percent. The Asia Pacific region had revenue of $2.4 billion, while operating margin increased +230 bps to +7.8 percent.

Ford reaffirmed its full year 2015 pre-tax profit guidance of $8.5 billion to $9.5 billion on higher automotive revenue, operating related cash flow and operating margins versus its full year 2014.

Ford stock has been trading in a tight range between $13.25 and $16.50 per share since dropping under $17 per share in September of 2014. With today's results, bullish overall market conditions and continued improving sales in North America, the stock could gradually test the higher end of its range.

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Published on Jul 28, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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