The Ford stock price jumped 2.6% to $15 Tuesday morning after the automaker posted its highest ever quarterly profit in North America.
Ford Motor Co. (NYSE: F) earned $0.47 per share, or $1.9 billion, in Q2. That was comfortably better than earnings per share (EPS) consensus estimates of $0.37. It was also handily better than EPS of $0.32 on revenue of $1.3 billion last year.
Ford's 44% year-over-year (YOY) Q2 profit gain marked the automaker's best overall quarterly performance in 15 years.
North America was a bright spot last quarter. Ford booked a record $2.6 billion in pre-tax operating income from the region. That was up $2.4 billion YOY.
Demand has been strong for Ford's F-Series trucks.
Ford has said dealers won't be fully stocked with F-Series trucks, which account for 90% of its global profits, until September.
Demand has been particularly strong for the new, all-aluminum F-150 trucks since they debuted late last year. But the brand experienced some production issues early on. Since then, Ford has ramped up production and is better positioned to meet demand.
"Ford is all about the second half of this year," David Whiston, an analyst for Morningstar Inc. who rates Ford the equivalent of "Buy," told Bloomberg. "The F-150 will be at full availability then, and the new Edge and Explorer SUVs are coming out at a time when gas is still pretty cheap."
The auto industry is expected to sell about 17 million new cars and trucks this year. That would mark the industry's best year in more than a decade. Ford is poised to benefit from the solid pent-up demand for new vehicles.
A fantastic quarter and upbeat guidance are just two reasons to be bullish on Ford's stock price. Its attractive 4.1% dividend yield is another.
But there's another reason we're bullish on the Ford stock price in 2015. The company is now tapping into a brand-new market. One that's targeted at millennials and is a billion-dollar industry...
Ford Stock Price Gets a Lift from the "Sharing Economy"
Concerns have recently risen that traditional automakers like Ford and General Motors Co. (NYSE: GM) represent the "old school" auto industry.
Viewed as leaders in the "new auto industry" are luxury electric car maker Tesla Motors Inc. (Nasdaq: TSLA) and Mobileye NV (NYSE: MBLY), a supplier of advanced driver assistance technology and products.
But you can now add Ford to the "new auto industry" list.
Ford has addressed concerns that many potential first time cars buyers are forgoing purchasing a vehicle, depending instead on ride-sharing outlets such as Uber, Lyft, and Zipcar.
Ford has "made an unorthodox investment in a new kind of 'assembly line' to join the competition," explains Money Morning Capital Wave Strategist Shah Gilani.
In an experiment that runs through November, Ford is marketing the "Getaround" ride-sharing app to 14,000 Ford owners in the San Francisco area. Getaround is a peer-to-peer (P2P) platform that lets people rent all kinds of cars for as little as $5 an hour.
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Ford's aim is to turn those renters into buyers.
"If the renters like the Fords they rent, there's a much better chance they'll eventually buy a Ford than if they had never tried one," Gilani said. "And for investors like you, Ford's partnership with Getaround means that it is going to catch the profit wave of a rapidly growing sector."
That's why Gilani likes "accumulating a position in this old-line but forward-thinking auto manufacturer."
Ford is also making its vehicles much more technologically advanced...
In March, Ford unveiled its S-Max car, which boasts an intelligent speed limiter. The S-Max can read signs with its traffic sign recognition system and adjusts for speed accordingly. And it doesn't need to pull down the brake to slow down the car.
These safety feature technologies are a step in the direction of the autonomous car.
"With cars more than a year or two old, we're talking no backup cameras, no collision-avoidance sensors, Bluetooth, or integrated GPS," Money Morning Defense & Tech Specialist Michael A. Robinson noted. "That becomes an additional incentive to buy a new car or truck."
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Related Articles:
- Bloomberg: Ford Drives Fully-Loaded F-150 Sales to 44% Profit Growth
- USA Today: Ford Profit Surges As Big Vehicles Soar
- MarketWatch: Ford Jumps on Profit; DuPont Lower on Outlook