The headlines about Ford’s (F) second quarter will all be about its $7.8 billion loss. Most of that red ink is for asset impairments and does not directly address how the core operating businesses are doing.

Once investors look outside the US, Ford is doing fine, but not fine enough to float Ford’s entire boat.

Even with all of its cost cutting initiatives, Ford lost $1.3 billion in North American, much worse than the $270 million loss last year. The company said that an "unfavorable" product mix and lower unit sales hurt results in the region. That bad mix related almost completely to lost profits on trucks and SUVs. Those dollars won’t be back.

In South America, Ford posted a pre-tax profit of $388 million, up from $255 million a year ago. In Europe, the numbers were remarkably strong. Pre-tax profits there were $582 million, up from $262 million a year ago.

In Asia, Ford’s profits were much more modest than they will have to be going forward given the importance of China as a market. Ford Asia Pacific Africa reported a pre-tax profit of $50 million, compared with a pre-tax profit of $26 million a year ago. If profits in the region cannot start to move into the $100 million to $200 million level per quarter, Ford is not getting much out of the region.

The earnings highlight the extent to which Ford is becoming a tale of two companies. One exists in the US market and it trapped by old products, high fuel prices, and plant which will take years to re-tool

There is nothing wrong with Ford that being out of North America would not fix. Too bad that cannot happen.

Douglas A. McIntyre

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.