Monday, October 29, 2012

Ford Motor Company (NYSE:F) expects to perform better in third quarter

Ford Motor Company(NYSE:F) is set to report its third quarter results on Tuesday and it has said that it would perform better than the second quarter.

Last week, the company said that it would be closing down three of its plants in Europe, where it is making losses due to weak demand. The company's Europe operations are hurting the company and are expected to remain so till 2014.

The automobile maker sees losses of more than $1.5 billion in Europe this year, compared to an earlier forecast of $1 billion.
The company has said it will be closing down an under-utilised plant in Belgium. All the plant closures will impact about 6,200 employees.

However if Europe is a sore point with Ford, the Asia Pacific region is more than expected to make up for it. The company has invested a lot on the region and the returns are already being felt.

Morgan Stanley analyst Adam Jonas told investors, in a note, that he expected the company to post a 30 percent rise in its sales in the Asia Pacific region, riding on the success of its Focus cars in China.

He also said that he saw a 7 percent rise in sales in South America, led by a government stimulus and a 3 percent rise in North America.

In the United States, Ford saw a slowdown in sales in the third quarter. One reason was the surge in sales of Japanese cars, which seem to be regaining their popularity. Another reason for the slowdown can be attributed to the fact that two of its best-selling cars in the country, Escape and Fusion, saw some slacking down in sales as newer versions hit the market.

Analysts expect the company to earn 29 cents per share on revenue of $31.5 billion compared to earnings of 41 cents per share on revenue of $33.1 billion a year earlier.

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