Best to come at Ford as record profit precedes sales surge

Ford Motor Co., fresh off record first-half profit in North America, has plenty left in the tank as it builds more of the models pacing the U.S. auto industry’s growth.

Ford, the second-largest U.S. automaker, made $4.77 billion in its home region during the year’s first six months, driven by surging demand for Fusion family cars and F-Series pickups. The Dearborn, Michigan-based company is adding factory capacity to build more of both of those models starting this quarter.

Even with limited supply of models such as Fusion, which quickly became one of the top-selling cars in the U.S., Ford has gained the most share in a home market that continues to accelerate more rapidly than analysts estimated. Industry sales in July may again run at an annualized pace of almost 16 million, Ford said, keeping the U.S. on pace for the most deliveries of cars and light trucks since 2007.

“Did we probably leave a few sales on the table? Yeah, probably,” Mark Fields, Ford’s chief operating officer, said yesterday on a conference call. “We’re rectifying that as we go into the second half of the year.”

Unlike 2007 or 2000, when U.S. sales peaked at 17.4 million, Ford’s namesake brand has a more complete lineup, including competitive small and mid-size cars. With a new F-150 coming next year, the company may be poised for even better results.

Raising Outlook

Ford raised its outlook for automotive operating margin and cash flow for the year while cutting its loss forecast for Europe. It’s applying a restructuring plan there similar to Chief Executive Officer Alan Mulally’s strategy that led to North America’s record profit.

“We’ve said before that the company has the potential to grow earnings significantly over the next two to three years,” Peter Nesvold, a New York-based auto analyst for Jefferies Group LLC, wrote today in a report. “With favorable trends in the U.S. from replacement demand and the housing recovery, a likely bottoming in Europe, and growing market share in Asia, we like what we see.”

Ford reported second-quarter net income of $1.23 billion, or 30 cents a share, yesterday in a statement. Excluding some items, the per-share profit was 45 cents, exceeding the 37-cent average estimate of 17 analysts surveyed by Bloomberg.

The shares slipped 0.9% to $17.21 at 9:33 a.m. New York time after finishing at $17.37 yesterday, their highest close since January 2011. Ford gained 34% this year through yesterday, outpacing an 18% increase for the Standard & Poor’s 500 Index.

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