Ford’s profitability outstripped even yesterday‘s $1.37b estimate, coming in at a whopping $1.68b, as Ford made mad money in the North American market in the 3rd Quarter of this year, for a fifth consecutive profitable quarter. Global revenue was down by about $1b, but excluding Volvo from Q33 2009 results, revenue was actually up $1.7b. $1.6b of Ford’s profitability came from North America, as its most crucial market carried the company over weak overseas results. And with $900m in positive cash flow, Ford says its “automotive cash” will equal its debt by the year’s end, sooner than it had previously forecast. Ford paid of $2b of its revolving credit line last quarter, and plans to pay off the final $3.6b it owes the UAW VEBA trust in Q4. By the end of the year, Ford estimates it will have reduced its overall debt by $10.8b over the course of 2010. Hit the jump for a few key slides from Ford’s Q3 financial presentation.
Ford’s complete slide set can be found here in PDF format, but we’ve assembled a few of the most telling slides here.
Clearly North America is where it’s happening for Ford.
But where is Ford pulling those profits from? Volume and market share are up, and as identified yesterday, Net Pricing is a major contributor. Selling Fiestas for more than the cost of a Corolla is a great way to inflate already-healthy profits. But mix is important as well. Much of Ford’s volume gains have been in profitable trucks, as the F-Series is having one of its better years in some time.
After all, Ford’s North American market share actually declined significantly in the third quarter… but its retail share actually increased. This seems to prove that Ford is getting off the fleet-sales jag that has brought overall sales levels up, and has particularly buoyed the Detroit firms. And why not? Ford is making enough money due to consumers choosing its more profitable products, and by securing better transaction prices for its vehicles. Though Ford ran at 30 percent fleet for most of the year, it hasn’t seemed to hurt demand, and Ford’s proving that it can lay off the “empty calorie” volume and focus on making money.
And making money it is. If Ford can end the year with more cash than debt and keep its sales and pricing momentum up into next year, when key products like the 2012 Focus launch, it will cement the Blue Oval’s status as the Detroit automaker to beat.