Ford stock price and earnings soaring beyond expectations

An upward perspective of buildings on Wall Street

Ford stock has been soaring in 2010 and the Ford earnings report issued Tuesday showed a net profit as the auto maker plans to increase production. Flickr photo.

Ford stock is blowing up and the Ford earnings report released Tuesday shows its best quarterly performance in six years at $2.1 billion. The Ford Motor Co., the only Detroit automaker not bailed out of bankruptcy with money loans from the Federal government last year, has earned a profit for four consecutive quarters while its domestic rivals flounder. 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. The Ford earnings report showed net profit equaling 50 cents a share, blowing away Wall Street expectations of 32 cents a share. One year ago, Ford stock traded at $1.91 a share, and the Ford earnings report showed a loss of $1.4 billion–a net loss of 60 cents a share. 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 planned 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. It plans to introduce new models later this year with the aim to capture a bigger piece of the growing market for smaller, more fuel 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 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 United States rose to 16.6 percent in the first quarter, up 2.7 percent from the first quarter 2009. It outsold General Motors in February for the first time in 50 years. In addition to draconian 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 more than nine million vehicles and the resulting publicity nightmare of the past six months probably hasn’t hurt Ford stock either.

Ford stock outlook

The Ford stock outlook hints that the Ford stock price may not sustain its current rally. The New York Times reports that Ford’s chief financial officer Lewis W.K. Booth 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 if on cue, Ford stock was falling Tuesday after the company’s earnings report was released. As of noon eastern time the Ford stock price was down about 6.5 percent at $13.50 a share. Monday’s closing price for Ford stock was the highest since January 2005. Debt survival may be an issue in the Ford stock outlook. The company still has much more debt $34.3 billion, than cash, $25.3 billion.