It was the company’s best February sales total since 2007. As analysts had predicted, sales of Ford’s F-Series pickups were quite strong, which is good news for shareholders – as are the strong results for some of the Blue Oval’s newest models.
Strong sales for key models bode well for profits
From an investor’s perspective, the big news is that Ford Motor Company (NYSE:F)’s full-sized pickup line continued its streak of nice year-over-year gains. Sales of the F-Series lineup, which includes the popular mass-market F-150 pickup as well as its heavier-duty F-250 and F-350 siblings, were up 15.3% over year-ago totals, a strong result in a market that may have slowed somewhat during the month — though arch-rival General Motors (NYSE:GM) also saw sizable sales gains for its pickups in February.
Ford’s PR crew was quick to point out that February marked the 19th consecutive month of monthly sales increases for the F-Series, a streak that tracks nicely with Ford’s growing profitability in North America. Pickups are among Ford’s most profitable products, and their steady, high-volume sales are a major contributor – the major contributor, some analysts argue – to Ford’s profits here at home.
But pickups weren’t the only bright spot for Ford in February. Sales of its two most recent new models, the Fusion sedan and the Escape SUV, were outstanding – up 28% and 29%, respectively, over year-ago totals. Again, that’s good news for Ford watchers, as these two new vehicles look to be keeping Ford’s recent new product winning streak alive.
Another relatively recent hit product, Ford’s Explorer SUV, also had a terrific month with a 58.9% year-over-year sales increase – but the weather might have had something to do with that. While last February was unseasonably warm in many parts of the country, this past month was more typical, with significant snowfall in the Northeast and Midwest U.S. That might have contributed to the Explorer’s gains, while helping to explain (for instance) the 18% drop in sales posted by the Mustang.
Focus sales dropped. Time to worry?
Meanwhile, another of Ford’s high-profile products had just a so-so month. Sales of the compact Focus, which became one of the world’s best-selling cars last year, were down almost 11% over year-ago totals. Are pressures from the likes of Honda and Toyota catching up with Ford’s hit small car?
I’m not too worried, at least not yet, for two reasons. First, the total sales numbers were still solid: Ford moved almost 21,000 Focuses during the month. Second, February 2012 was an absolutely killer month for the Focus, when it posted a 114% gain over prior-year numbers for the model’s best showing in over a decade. That would have been hard to top under any circumstances.
It’s also possible that the striking new Fusion is “cannibalizing” Focus sales to some extent, meaning that shoppers considering the Focus might instead be drawn to (and end up purchasing) a Fusion instead after arriving at the dealership and touching the metal.
But either way, there’s no urgent cause for concern yet – though I’ll be watching Focus sales closely over the next few months.
The upshot: Ford’s gains look set to continue
As it did in January, Ford again had a solid U.S. sales month that bodes well for the company’s first-quarter profits. Looking a bit further ahead, Ford also announced its second-quarter production plan. The Blue Oval plans to build 800,000 vehicles for North America in the second quarter, it said on Friday, an increase of 9% over year-ago totals. Its previously announced plans to build 770,000 vehicles for the region in the first quarter remain unchanged.
Clearly, Ford expects its solid U.S. sales gains to continue for a while longer. That’s likely to be good news for Ford shareholders as 2013 continues to unfold.
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