Ford Stock (F)
Ford stock got a nice lift in early trading after Ford posted better-than-expected earnings despite a small decline in sales. On an adjusted basis, Ford earnings came to 40 cents per share, vs. analysts’ forecast of 36 cents.
That’s a substantial earnings beat — something the market usually loves — but it wasn’t without some blemishes. On the plus side, Ford posted better-than-expected results in North America and Europe. Indeed, Europe was profitable for Ford for the first time in three years.
Furthermore, Ford lowered costs, which allowed it to post higher earnings even as revenue slipped to $37.4 billion from $37.9 billion a year ago. With better sales in two major regions and lower costs, Ford stock deserves some applause.
On the downside, South America and Asia were disappointing. In South America, Ford suffered a wider-than-expected loss in operating profit. As for Asia, China was a bright spot for Ford — market share hit a record 4.6% — but overall operating profit for the region came up well short of projections.
Ford is doing well and the outlook is fairly bright. Hey, there’s a reason why Ford stock is up 15% this year to outperform the broader market by 7 percentage points. A forward price-to-earnings ratio of 9 makes for an attractive valuation on Ford stock, and the 3% dividend yield isn’t shabby either.