Ford generating growing profits
Ford’s ( NYSE: F) recently reported third- quarter earnings offered much to smile about.
For starters, Ford earned about $ 800 million more in “pricing” — the ability to get better asking prices for its products — than it did a year ago. That’s huge. Ford’s much- improved vehicles have greatly increased its competitive position and its ability to sell without big discounts — all over the world, even in recession-crushed Europe.
But the big story has been here in North America. Excluding taxes and special items, Ford’s North American earnings surged 48 percent. Ford’s U. S. sales have been mediocre in terms of absolute numbers, lagging key competitors. But its ability to ask and get premium prices for its products— perhaps assisted by short supplies of some hot models — made for a strong increase in profits anyway.
Ford has made huge investments in its car lines in recent years, and those have paid off: Models like the Focus are big sellers all over the world, thanks to high perceived quality, advanced features and much- improved fuel efficiency. But for all of Detroit’s Big Three, pickup trucks are the high- volume, high- profile, high- margin products that drive just about everything else.
While Ford still has substantial work to do overseas, it’s generating growing profits at home. ( The Motley Fool owns shares of Ford and its newsletters have recommended Ford and GM stock.)