What happened
Shares of Ford Motor Company (F 1.16%) were trading higher on Wednesday afternoon on signs of an accelerating recovery after U.S. auto sales totals for May turned out to be better than analysts had expected.
As of 3:15 p.m. EDT, Ford's shares were up about 5.2% from Tuesday's closing price.
So what
While Ford no longer reports monthly sales results for the U.S., overall sales of "light vehicles" (cars, pickups, and SUVs) appear to have fallen about 30% in May from a year ago. That was less of a drop than analysts had predicted -- and an improvement over April, when U.S. auto sales were down by half.
Will strong pickup sales pull Ford out of this crisis? It's too early to say, but signs are good so far. Image source: Ford Motor Company.
The seasonally adjusted annualized rate (SAAR) of light-vehicle sales in the U.S., a widely watched figure, was 12.17 million in May, according to Automotive News. Analysts had predicted a result in the mid to high 11 million range. The SAAR fell to 11.33 million in March, when most auto dealers closed mid-month amid the COVID-19 pandemic, and to just 8.6 million in April.
Edmunds estimated that Ford's U.S. sales probably fell about 32% in May from May of 2019, but they were likely up by a similar percentage from April.
Now what
After reopening most of its factories in the U.S. and Canada in mid-May, Ford is continuing to ramp up production to restock its dealers as consumers return to showrooms. Ford is believed to be prioritizing pickup-truck production, as sales have proven surprisingly resilient since the onset of the pandemic, and supplies are thought to be tight.
As auto investors know, pickups are a key driver of profit for Ford; if production remains on track and demand remains brisk, Ford's second-quarter results might not be quite as bad as the company predicted back in April.
