Ford Posts Solid Earnings, Outlook Improves

Ford essentially reiterated its forecast for the year, calling for pretax profit “about equal/higher” than the $8 billion in profit booked in 2012. Operating margin is expected to be “about equal” to 2012’s reading of 5.3%, and automotive cash flow is expected to be “higher” than last year’s $3.4 billion. The consensus analysts’ estimate for 2013 EPS is $1.43, which represents a positive adjustment of $0.04 per share since the end of the first quarter.

The company’s CEO said:

Our strong second quarter with improved results in every region around the world is another proof point that our One Ford plan is continuing to deliver and is building momentum. We remain absolutely committed to our plan of serving customers in all markets with a full family of vehicles offering the very best quality, fuel efficiency, safety, smart design and value. As we do, we are providing profitable growth for everyone associated with Ford.

CEO Alan Mulally stays on message, at least. That is the third quarter in a row that his statement has been virtually unchanged.

Ford continues to expect operating margins in North America to come in around 10%, slightly below the second quarter’s 10.4%.

Results in South America are expected to be about break-even. Ford’s operating margin for the quarter rose to 5%, from 0.2% a year ago, but for the first half the company’s margin was still a negative 1.3%.

Ford expects to post a pretax loss of $1.8 billion in Europe, where operating margin remained a negative 4.6% in the second quarter.

The company expects its Asia/Pacific/Africa business to be profitable in 2013. Operating margin in the second quarter rose by nearly nine points to 5.8%. Ford posted its best ever second quarter in this sales region, with volume up 27% and revenue up 35%, not including its joint ventures in China.

Ford’s shares are up about 3% in premarket trading at $17.44, above the 52-week range of $8.82 to $17.29. Thomson Reuters had a consensus analyst price target of around $17.35 before today’s report.