Frap
Opening of a new era at Flat Rock Assembly Plant. Photo credit: Ford.

Over the last few years Ford (NYSE:F) has had a trend of rallying through the early parts of the year, only to swoon during summer. Today's earnings could play a pivotal role in whether we see another summer swoon from Ford, or if it sets on a path to test its 52-week high of $14.30 on Jan. 1. Personally, I'd love to see the latter, and Ford has a great chance to do so with today's numbers. North America led the way with strong profits, and Europe losses were lower than I expected. Let's break it down and watch as the stock price reacts throughout the day.

Expectations
We knew going in to this conference call what to expect. We knew that record sales for the quarter had been set by Ford's Fusion, Escape, and Explorer. The F-Series – Ford's profit driver – also sold extremely well and even had plants running a third shift to keep up with demand. Expectations were for strong North American profits, but worries about losses in Europe continued to pile up, worries that were quickly forgotten this morning as strong profits definitely offset Europe. Analysts expected about $0.37 earnings per share, which Ford topped, reporting EPS of $0.40 on $1.6 billion after tax profits. That compares favorably versus last year that came in at EPS of $0.35 on $1.4 billion. Wait – it gets better!

Europe
Last year Ford lost $1.7 billion in Europe, averaging out to be $425 million per quarter. Unfortunately the losses increased as the year went on, with the losses topping $732 million in the fourth quarter – ouch. Today is great news on the European front where it appears some of the cost savings have taken hold. Ford reported the loss in Europe at $462 million: It seems odd to be excited about a $462 million dollar loss, but this is good news – trust me. In addition to that, one thing that helped offset losses in Europe last year was Ford's financial division – which brought in $1.7 billion in profit for 2012. In the first quarter, profits from that division hit $503 million and outpaced losses in Europe itself. If Ford can keep losses in check – or even improve on them –  2013 will be a great year for the folks at the Blue Oval.

Margins
I heard rumblings and rumors of margins that could hit up to 12% this quarter, which is a lofty expectation in the auto industry. The reason for the high expectations was that plants were running at maximum capacity. Each third shift that produces a popular Fusion or F-Series is much more profitable to the bottom line – as overhead costs are minimized. The North American operating margins came in at 11%, which is slightly below the first quarter in 2012, but still very strong.

Incentives and pricing
In other good news, Edmunds.com shows the average people paid for Ford's vehicles is up 3.7% for an average of just over $33,000. That favors comparably to $31,900 last year and is simply due to the fact that people want to buy Ford's newer, more popular vehicles. Ford also saw its incentives per vehicle sold shift down to $2,700, or 2.2%. It's unclear whether this trend can continue, especially for the profit-driving F-Series that will have to match up against the new 2014 Chevy Silverado this spring. 

Spring bloom or swoon?
It's unclear how the stock price will react during this morning, as investors are finicky creatures. As a long-time shareholder and one who covers the auto industry for a living – I'm very pleased with the quarterly report. I'm optimistic that the future of Ford in Europe will be profitable ahead of schedule and excited at how well Ford's vehicles are selling in North America. Margins are solid, incentives are down, and overall pricing is trending upwards. Did I mention that Ford still trades at a favorable P/E ratio? I expect Ford to buck the trend of its historical summer swoons and keep driving profits all year long.

Motley Fool contributor Daniel Miller owns shares of Ford. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.