Despite lower sales of Ford's best-selling vehicle the F-150, it still clocked a record margin, which bodes well for the second half of the year, says analyst Colin Langan.
Your support are on the rise today after the number two auto maker turned in second quarter results that far surpassed Wall Street estimates. This despite facing a number of headwinds including a sluggish European market and a stronger dollar. Here to discuss the quarter is Colin Langen he's the US autos analyst at U via Mike Allen. And carrier. Support reported record North American profits and overall beat the street earnings per share 47 cents and revenue up 37 point three billion dollars. How did all of this matchup with your expectations. Yet in North America came in far better than earlier expecting Europe actually came in a bit better and even Asia Pacific which was posted breakeven actually pose and almost 209 dollar profit so. Really globally that North America by far the biggest driver. If we're you surprised at the results. Yeah I think if you look at North American particular this is a quarter that the F 150 was down about 9% year over year. That is one of the most profitable vehicles so the fact that they can post a record margin eleven points 11%. North America margin it's actually quite good bodes very well for the second half of the year. And now their new aluminum body F 150 did so well but also it was upscale versions of its other trucks and suvs. How to the world to these luxury versions play in the quarter. I mean at this point I'll reported that it actually the F 150 was fairly not a positive contributor to the quarter on a year to year basis. Will be in the second half and that's because production is is sat down at their really ramping up product up so this is probably the last quarter where there in the rant mode. IQ three Q Porsche V positive. From a sales perspective. ATP perspective. Very good pricing they're seem very pleased by the next level on. You know we've done a lot of survey work on the F 150 in and you know at the results are actually very consistent with what we were expecting on ATP is an example that the guy a lot of that is driven by the trim levels being very high. Okay so you mentioned that the F 150 still has room to grow when he had to poke other holes and ports or port. I mean I think if you go to the second half of the year Europe has always easily that weaker so you and that they were very close to breakeven this quarter it's probably gonna deteriorate. I'm south America's concern for the global auto industry vines they're extremely low. You know I think Ford did a good job managing the weak volume spun out will probably be some losses for the near term. Okay and then the last question for you has to do with incentives we haven't seen a whole lot from the US automakers this year. What you expect in the second half is that gonna continue to be a trend where my people are still paying up for vehicles and not getting a lot of incentives incentives. Yeah I think for the most part I mean if you look at the utilization of the industry it's around 90% which is extremely high historically it's average median and hit a low of 60% utilization. When your facilities are being fully utilized there's not a lot of incentive to cut price to chase share. I think you'll probably see that trend where trucks continue to see very very good pricing because they're that close of 100% utilization levels and certain cases. We're cars we'll probably see a moderate more amount of pressure but overall for the industry I think it's going to be a positive trend. Great we'll Colin thank you so much for your time today we really do appreciate it. Up next our round we've been speaking with Colin Lang and he's the US autos analyst at UBS. I'm Jeannie airman and this is Reuters.