Ford Motor, Inc. (F) just reported another awesome quarter, demonstrating that the company’s turnaround strategy continues to accelerate. With rising estimates, a bullish next-year estimate and an attractive valuation, Ford isn’t running short on momentum.
Ford’s Q2 results from July 23 built on the company’s recent string of earnings surprises. Revenue for the period was up 17% from last year to $31.3 billion. When excluding the results of Volvo, which Ford has since sold, sales were up 30%.
Earnings for the period came in at 61 cents, well ahead of the Zacks Consensus Estimate of 40 cents, moving the company’s four-quarter earnings surprise to 112%.
Ford’s year-over-year comps are pretty amazing, with its pre-tax operating profit coming in at $2.9 million for the quarter, a $3.5 billion improvement from last year.
The company’s profound global footprint is also paying off, with its North American, South America, European and Asia/Africa all showing amazing gains from last year.
Balance Sheet Improving
Ford also continue to work on its balance sheet, reducing its total debt load by $7 billion to $27 billion, which will enable the company to save about $480 million in annual interest payments.
Although its still a bit early for any pending estimate revision to hit the consensus, we have seen a steady trend higher over the last few months, with the current year up 32 cents in the last 90 days to $1.35 and the next-year estimate up 17 cents to $1.59, a solid 18% growth projection.
In spite of the outstanding gains and general enthusiasm, Ford still has a ridiculous valuation, trading with a forward P/E of 9X compared to its peer average of 27X.
Shares of F recently rebounded from a key trend line after dipping lower with the market in May and June. The MACD below the chart also looks bullish, with the short-term moving average trading ahead of its long-term counterpart. Look for support from the trend line and the short-term low on any weakness, take a look below.
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