The Future Looks Bright for Ford and General Electric

It's earnings season, and quarterly reports are hitting the news feeds. After many earnings reports today the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is trading 0.57% higher. A handful of industrial stalwarts have done their part to bring the markets higher. General Electric's (NYSE: GE  ) stock surged following its report, Boeing posted strong third-quarter results yesterday, and Ford (NYSE: F  ) took the baton and ran with it this morning. Here are some of the highlights.

Ford turned in its 17th consecutive quarter of profitability, further distancing itself from the dark days between 2006 and 2008 when the company's losses totaled more than $30 billion. Ford posted a record third-quarter pretax profit of $2.6 billion, which was nearly half a billion higher than the same period last year. Excluding one-time charges, third-quarter earnings per share came in at $0.45, which was $0.05 higher than last year and well ahead of Wall Street estimates of $0.37 per share.

Ford also reported that wholesale volume and total revenue increased 16% and 12%, respectively. Its fresh portfolio of popular models has helped the Blue Oval increase market share in all regions in year-over-year comparisons.

"Ford's record results in the third quarter show the strength of our One Ford plan around the world," said Alan Mulally, Ford president and CEO. "Working together, we remain committed to serving customers in all markets with a full family of vehicles, offering the very best quality, fuel efficiency, safety, smart design and value."

North America drives the majority of Ford's profits, but that's beginning to change as the automaker plans to complete its goal of doubling its market share in China by 2015. In addition, the fastest way for Ford to improve net income is to break even in Europe. Ford narrowed its losses in Europe faster than expected and improved guidance on this year's losses in the region. As profits from international markets continue to grow it will surely be reflected in Ford's stock price going forward.

Back inside the Dow Jones Industrial Average, General Electric is trading a full percent higher today. Investors were happy with General Electric's third quarter, even though its revenue growth fell short of expectations and earnings per share barely met estimates. Typically the markets' short-term thinking would send General Electric's stock price down on the news, but in an eyebrow-raising move, its stock surged after Friday's announcement. I think the market has it right this time: General Electric is improving its focus and profitability.

Industrial margins jumped 120 basis points to 15.4% and are proof that General Electric's theme of simplifying operations is working. As management continues to focus on fewer business segments its industrial portfolio has become much stronger, which should bode well for investors going forward. In addition to a more focused and profitable operation, General Electric continues to return value to shareholders. It paid out nearly $6 billion in dividends and repurchased $8 billion of its stock in 2013. As long as GE continues to return value to shareholders and improve its operations, it's an intriguing industrial investment going forward. 

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