Stock And Earnings Soaring Beyond Expectation For Ford
Ford stock is blowing up and the Ford earnings report released Tuesday shows its best quarterly performance in six years at $ 2.1 billion. Ford Motor Company has earned a profit for consecutive quarters while its rivals flounder and is also the only Detroit automaker that wasn’t bailed out of bankruptcy with money loans from the Federal Government last year. By slashing costs and increasing sales, Ford stock price and Ford earnings report numbers have shifted from negative to positive a year ahead of schedule, even as the market for new cars has yet to recover.
Ford stock price soars
Ford stock hit a five-year high Monday at $ 14.57. When Wall Street only expected it to gain 32 cents a share, it actually went up 50 cents a share according to the Ford earnings report. Just a year ago, Ford stock traded at $ 1.91 a share, and the earnings report for Ford showed a $ 1.4 billion loss which is more than 60 cents a share in loss. Introducing new products, closing plants and eliminating tens of thousands of jobs is working like Ford boss Alan R. Mulally said it would when he took over four years ago. Presenting the Ford earnings report, Ford executives said the company expects to continue selling cars for positive cash flow in the immediate future.
Ford earnings report fuels production
Ford said it wants to build 625,000 vehicles in the United States and Canada in the second quarter, 9 percent more than the first quarter and 39 percent more than same period a year ago. Later this year, smaller and more fuel efficient cars should be introduced with the aim to capture a bigger piece of the growing market. Ford fans should probably be getting auto financing here in the near future 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
A Ford stock analysis shows an increase in price of more than 40 percent so far in 2010. Ford’s market share in the US rose to 16.6 percent in the first quarter, which is up 2.7 percent from the first quarter 2009. In February, it outsold General Motors for the first time in 50 years. Adding to the cost cutting and increased focus on quality, Ford’s gamble to forgo the government bailout appears to have paid off in spades as the images, and sales, of GM and Chrysler have suffered. Toyota’s recall of at least nine million vehicles and the resulting publicity nightmare of the past six months probably didn’t hurt Ford stock either.
Outlook for Ford Stock
The Ford stock outlook hints that 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 began falling after the company’s earnings report was released on Tuesday. Ford stock price was down about 6.5 percent at $ 13.50 a share by noon Eastern Time. Monday’s closing price for Ford stock was the highest since January 2005. An issue with Ford stock outlook may be debt survival. The company still seems to have much more debt $ 34.3 billion, than cash, $ 25.3 billion.
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