Ford Motor Company (NYSE:F) will report its third-quarter results after the bell on Wednesday, Oct. 28. Will it outperform Wall Street's expectations? 

What Wall Street expects

On average, Wall Street analysts polled by Thomson Reuters expect Ford to report adjusted earnings per share of $0.16 on automotive revenue of $32.86 billion. 

Both would be down from Ford's results in the third quarter of 2019, when it reported adjusted earnings per share of $0.34 per share on automotive revenue of $33.93 billion. 

(Wondering what those terms mean? Adjusted figures exclude one-time charges. Automotive revenue excludes revenue from Ford's financial-services subsidiary.)  

The front end of a red Ford F-150 pickup truck.

Strong demand for F-Series pickups might help Ford beat profit expectations in North America. Image source: Ford Motor Company.

Why Ford might do better

Despite the ongoing impact of the COVID-19 pandemic around the world, particularly in North America and Europe, Ford's sales in the third quarter were pretty decent. 

  • Ford's overall U.S. sales were down 4.9% in the third quarter from a year ago, but that doesn't tell the whole story. Sales of trucks, including Ford's high-profit pickups and commercial vans, were actually up slightly from a year ago, and retail sales of trucks were up 8.3% -- factors that might have boosted Ford's margin in North America.
  • Ford's sales in China began slipping long before the coronavirus outbreak, but they may be headed in the right direction now. The Blue Oval's China sales rose 25.4% in the quarter to about 164,000 vehicles on strong demand for the new-to-China Ford Explorer, Lincoln Corsair, and Lincoln Aviator SUVs. Again, that's a promising situation for profitability. 
  • Ford's results in Europe looked a lot like its U.S. results. Overall sales were down from the third quarter of 2019 (by 4.2%), but sales of some highly profitable products -- commercial vehicles, in this case -- were up 3.8% from a year ago. 

Long story short: Auto investors who look at the headline sales numbers from each market might be disappointed. But those who look a bit deeper, as we just did, will find reasons to be optimistic about the profitability of the sales Ford did make. 

A Ford Transit Custom, a mid-size commercial van, on a city street in Germany.

Ford doesn't sell its big pickups in Europe. But it does sell a lot of Transit commercial vans at good prices, and sales were up in the third quarter. Image source: Ford Motor Company.

Ford's outlook is likely to be cautious

All that said, I expect Ford to guide to a lower result, or even a loss, in the fourth quarter of 2020. The company warned in July that the need to retool its two truck factories ahead of the launch of the all-new F-150 would cost it some production. Given that Ford books revenue when vehicles are shipped to dealers, any lost production of its best-selling models means a drop in revenue.

Still, unless things in the U.S. take a significant turn for the worse, I think Ford's full-year 2020 result could come in considerably better than we would have expected even a few months ago. 

Will Ford beat Wall Street's expectations?

I think there's a good chance that it will beat the adjusted earnings-per-share number, with the mix of sales driving a better-than-expected operating margin. It might beat the revenue number as well: Ford's production totals were fairly strong in the third quarter, as its factories worked to replenish inventories depleted during the extended shutdown in April and May. 

We'll find out on Wednesday afternoon.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.