As if that wasn't enough, on Thursday the company announced a surprise series of management moves -- while making clear that its much-admired CEO will stay through at least 2014.
Let's take a closer look at this past week's doings in Dearborn.
The good kind of earnings surprise
The big story in Ford's earnings was its success in its home region, North America. And the big story there was Ford's margins in the region, which are up to 12% -- huge for a mass-market automaker.
What's driving that? Supply and demand, to some extent. While Ford's monthly U.S. sales increases have mostly lagged the overall market this year, part of that lag has to do with the fact that Ford's North American production of several key models is more or less maxed out, and has been for months.
That means the company is literally selling all it can make of some vehicles -- and that means Ford has been able to sharply reduce its per-vehicle spending on incentives. (Incentives are those "cash back" or cheap-financing deals often touted in TV ads. Those discounts are typically paid for by the automaker.) That reduction in discount offers, plus Ford's strategy of offering extensive and appealing (and high-profit) options packages on nearly all of its cars, has led to greater profits per car or truck sold.
The "truck" part of that equation is especially important for Ford, which sells a lot of its F-Series pickups and makes a lot of money on each sale. The good news for the Blue Oval is that its pickup sales have been rising, in part because General Motors' (NYSE:GM) pickups are older models that are set to be replaced next year. That bodes well for Ford's earnings in the coming quarter as well.
Big changes in Ford's executive suite
Ford surprised reporters and analysts, including your humble Fool, with a conference call on Thursday in which Executive Chairman Bill Ford announced a slew of senior-management promotions -- and, not incidentally, made clear that CEO Alan Mulally had committed to stay put through 2014.
Analysts have speculated for months that Mulally, 67, will retire soon. Some have speculated that uncertainty over Ford's succession plan has been weighing on the company's stock price.
But Ford went a long way toward ending that uncertainty on Thursday, announcing that its North and South America chief, Mark Fields, will assume the long-vacant title of chief operating officer. And while Bill Ford wouldn't quite come out and say it, it's clear that the opportunity to succeed Mulally is now Fields' job to lose.
Fields will assume day-to-day operational control of Ford, while Mulally focuses on long-range strategic planning -- while continuing to mentor Fields and other Ford executives, of course.
Despite Ford's recent success, Fields will inherit some real operational challenges when he takes the helm on Dec. 1:
- Domestic expansion. Fields has been running Ford's North American business, which has been very successful, as I noted. But production will need to expand, and that will be a challenge: Ford will probably need to add assembly lines to increase sales of popular models such as the Focus and Escape, which will require significant investments. Making those investments without compromising Ford's hard-won cost advantages will require careful management.
- Europe. Last week, Ford announced a comprehensive plan to overhaul its money-losing European operation. Responsibility for executing that plan will now fall, ultimately, to Fields.
- Asia. Ford has invested heavily -- more than $5 billion so far -- to expand in Asia, with hopes of a big increase in sales by mid-decade. Again, the plan is in place and under way, but execution will fall to Fields.
Fields will have plenty of help, of course. Ford announced several other major promotions on Thursday:
- Joe Hinrichs, the well-regarded head of Ford's "Asia Pacific Africa" region, will succeed Fields as head of Ford's North and South American regions.
- Stephen Odell, Ford's Europe chief, will add Ford's operations in Africa and the Middle East to his portfolio, including an important truck manufacturing site in South Africa.
- Jim Farley, Ford's marketing chief, will also assume global operating responsibility for the Lincoln brand. Farley is a talented executive who was recruited from Toyota (NYSE:TM), where he was general manager of its luxury Lexus brand -- an ideal background for the man charged with relaunching Lincoln as a global luxury-car maker.
- David Schoch, Ford's China chief, will take over responsibility for all of the Asia Pacific region.
- John Lawler, CFO of the Asia Pacific region, will now be CEO of Ford China.