Ford’s earnings next year will improve on solid profit in 2010, says Mulally

Article by Christian Andrei, on August 29, 2010

Ford Motor Co.'s earnings next year will improve on solid profit in 2010, according to CEO Alan Mulally. As the carmaker's rivals had gone into bankruptcy, Mulally had been instrumental in ending three years of losses in 2009.

At the shareholders annual meeting, Mulally said that Ford anticipates that the improvement will continue in 2011 and that it is on a path now of profitable growth.

He added that Ford will be able to extend this year's pretax profitability as demand goes up and as new models, such as the redesigned Focus small car, are launched. This outlook comes after Ford had reportedly become concerned about higher commodity prices and a fragile economic recovery.

Mulally seeks to quash investor skepticism as shown in a stock plunge that's more than three times deeper than the Standard & Poor's 500 Index's drop since Ford's posting of $2.1 billion in quarterly net income last month. In an interview on May 11, Jeffrey Spotts, a New York-based portfolio manager, said that Ford is doing âfantastic but that he's unsure about the upside.

Spotts was able to sell his Ford holdings last month for an average return of 275%. He pointed out further that there were regular buys signals when Ford's outlook was very cloudy and not as positive.

Investors who supported Mulally's turnaround propelled the shares more than eightfold from mid-November 2008 through April 26, when they hit $14.46, a five-year high.earnings next year will improve on solid profit in 2010.

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