Ford stock appears to be blowing up while the Ford earnings report that was released on Tuesday shows its best quarterly performance in six years at $ 2.1 billion. The Ford Motor Co was the only Detroit automaker that wasn't bailed out of bankruptcy with low interest loans from the Federal Government last year and has earned a profit for consecutive quarters while its domestic rivals flounder. By cutting their costs and increasing their sales, Ford stock and earnings report numbers shifted from negative to positive a whole year ahead of their schedule, even as the new cars market hasn't recovered yet.
Stock price for Ford soars
Ford stock hit a five-year high Monday at $ 14.57. The Ford earnings report showed net profit equaling 50 cents a share, blowing away Wall Street expectations of 32 cents a share. Ford stock traded at $ 1.91 a share just one year ago and the earnings report showed it had lost $ 1.4 billion, which is 60 cents a share. Alan R. Mulally said it would work to introduce new products, close plants, and eliminate tens of thousands of jobs when he took over just four years ago as boss. Ford executives said when presenting the earnings report that they expect to continue to sell cars for good cash flow in the future.
Ford earnings report fuels production
Ford said it wants to build 625,000 vehicles in the United States and Canada within the second quarter, 9 percent more than the first quarter and 39 percent more than same period a year ago. Later this year it plans to introduce new smaller and a lot more efficient cars. Ford fans will be getting auto financing for new versions of the Fiesta and Focus, plus a retooled Edge crossover and a more fuel efficient Explorer SUV.
Ford Stock and an analysis
An analysis of Ford stock will show an increase in price of more than 40 percent so far in 2010. Ford's market share within the United States rose to 16.6 percent in the first quarter, up 2.7 percent from the first quarter 2009. It outsold General Motors for the first time in 50 years in February. Adding to the cost cutting and increased focus on quality, Ford’s gamble to forgo the government bailout seems to have paid off in spades as the images, and sales, of GM and Chrysler have suffered. Toyota’s recall of more than nine million automobiles and also the resulting publicity nightmare of the past six months probably hasn’t hurt Ford stock either.
Ford stock outlook
The Ford stock outlook hints the Ford stock price may not sustain its current rally. The New York Times reports that Lewis W.K. Booth, Ford’s chief financial officer, said the company does not necessarily expect each of the next three quarters to be as strong as the first, particularly if an improving economy leads to higher interest rates later in the year. As it seemed to be on cue, Ford stock started falling after the company's earnings report was released on Tuesday. At noon Eastern time, Ford stock was already down about 6.5 percent at $ 13.50 per share. Monday’s closing price for Ford stock was the highest since January 2005. In the Ford stock outlook, debt survival might be an issue. The company still has much more debt $ 34.3 billion, than money, $ 25.3 billion.
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