Ford’s Earnings…Not Really Built Tough

Ford announced first quarter earning in which net income declined, to $1.1 billion from $1.7 billion. Earnings per share were $0.29 cents per share, down from $0.44, but better than expected. Also, revenue fell to $40.3 billion from $41.9 billion a year earlier, but higher than expected. Beating the expectations were enough to send the stock 10% higher on Friday, it’s best one day performance since 2009.

“North America’s EBIT improvement was driven by our F-Series, despite new competitive challenges; Ranger as it came to market, and Transit America’s best selling van,” Ford CFO Bob Shanks told investors on a conference call late Thursday. “The region’s EBIT also benefited substantially from the decision to exit traditional passenger sedans.”

“The strong financial performance of F-Series was matched by robust performance in the marketplace,” he added. “In the quarter and in the face of new competitive entries, F-Series customer sales and average transaction prices held strong from a year earlier while share of segment increased.”

Source

If you know about pickup trucks, then you know they are very profitable.  Ford can thank the F-series for any type of success Ford had this past quarter. 

But the question moving forward is what happens if gas prices continue to go higher? 

Another question is what happens when consumers realize they are head high in debt and/or the banks have locked their vaults and loans are harder to come by? 

The chart suggests the rally will be short lived.

Look for price to pull back before price hits $12.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.