Ford's Fine Day

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By Motley Fool Staff
April 16, 2003

One day after rival General Motors (NYSE: GM) expressed misgivings about the near future, Ford (NYSE: F) reported a strong first quarter and saw its stock pop over 10% in the process.

The world's No. 2 automaker (behind GM) earned $0.45 a share in the quarter, well ahead of the consensus estimate of $0.22. U.S. market share increased from 20.7% to 21.2%, and the company also reaffirmed guidance for the rest of the year.

Considering Ford has lost 50% of its value over the past 11 months, today's news was quite a relief. It also comes on the heels of a Wall Street Journal feature that details the company's plans to move vehicles through the development and production process more quickly. In light of the fact it takes Ford about a year longer than competitors to bring a new model to the market, that's an important objective.

There are still tough times facing the U.S. auto industry, however. Potential investors should note that foreign brands such as Toyota (NYSE: TM), Honda (NYSE: HMC), Nissan (Nasdaq: NSANY), BMW, and Hyundai are stepping up production in the more lucrative light-truck and SUV market. There is concern that if U.S. buyers start patronizing foreign brands and SUV sales begin to drop, Detroit's already-thin profits could deteriorate quickly.

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