Shares of Ford Motor Co. (NYSE: F) are soaring today after the automaker reported the best kind of earnings -- an unexpected profit.The automaker earned $100 million, or 5 cents a share, compared with a loss of $282 million, or 15 cents, a year earlier. Wall Street had expected the company to lose money. Revenue was $43.5 billion, up slightly from a year earlier. Excluding discontinued operations and one-time items, profit was $525 million, or 20 cents.
"The results of this quarter are encouraging, particularly our outstanding performance in Europe and South America," said CEO Alan Mulally in the earnings release. "We believe this is an indication that our
efforts to leverage Ford's global assets across the world will bear fruit."
Cost cutting certainly helped. The company's North American Automotive business had a pre-tax loss of $45 million, down from $613 million a year earlier, as it slashed $1.2 billion in costs. But that's still not enough, and the company knows it. More layoffs are looming, according to the Detroit Free Press.
"The Dearborn-based automaker had targeted 8,000 hourly workers for its recent early-retirement and buyout offers," the newspaper says. "However, the automaker achieved only about half of that. That's because many workers willing to leave the company voluntarily have already done so. In all, Ford has shed 46,300 workers, or 35% of its salaried and hourly North American workforce, since 2005."
To be sure, Ford still has plenty of problems including declining market share and fierce competition from both U.S. and foreign rivals. But Mullaly is a savvy executive. He won kudos from Wall Street during his time at Boeing Co. (NYSE: BA) and I have argued that Ford's stock may be of interest looking for a contrarian play.
At least some on Wall Street are starting to believe he is for real.
Fifth Third Asset Management portfolio manager Mirko MIkelic told Bloomberg News, "In the face of strong headwinds, it looks like the turnaround is taking hold."
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Reader Comments (Page 1 of 1)
4-24-2008 @ 3:35PM
Mikey D said...
I recently purchased the Ford edge. The vehicle is the best vehicle I've ever owned. Ford hit a homerun with this vehicle. I was a Nissan customer for the last 9 years.
4-24-2008 @ 8:13PM
Bill Brown said...
My Lincoln MKZ is great,love every thing about it.J.P.Powers says Ford has surpassed Toyota in quality
4-24-2008 @ 10:37PM
REB said...
I think Ford has come a very long way in a short time with their newer vehicles.. Lots of extras... they are really looking much better. I have a ford ranger ---- one of the best and economical.
7-01-2008 @ 2:48PM
monte said...
I agree that Ford has finally found the magical formula to produce great cars. Consumer Reports and Jd Powers agrees that they are now the best American car company when it comes to quality. It is not even close. Its quality is surprising Japanese like and everything points to it as surpassing the Japanese very soon in all catagories. Believe it or not all Japanese cars do not have superior quality. Not even all Toyotas or Hondas. But Ford has been batting 1.000 with the last few cars it produced. Wait till the average customer realizes this. Ford will pass Toyota and GM to become the worlds largest automobile manufacturer.