One Thing to Look for in Ford Motor Company (F)’s Q2 Earnings

Caveat
Even with all the good news in the second quarter, we still have to remember that Ford lost $462 million in Europe in Q1 and didn’t revise its estimated yearly loss of $2 billion. That likely means Ford is either being cautious to not jump the gun on recovering its profits faster than expected in Europe, or it expects little to no improvement for the rest of the year. As a Ford shareholder I’d love to see a surprise decline in Q2 losses, but even if the losses remain exactly the same as in Q1, everything is OK in the big picture and the plan to break even in Europe in 2015 still remains. It’s also a good sign that Ford isn’t closing any more plant to cut capacity, which shows that management believes Europe’s automotive sales have bottomed out.

Bottom line
It can’t be underestimated how much the losses in Europe mean to Ford Motor Company (NYSE:F)’s share price. If Ford can indeed break even in the region by the end of 2015 it would salvage nearly $2 billion in lost profits per year. If all the positive news from Q2 sales volume and market share translates into a decline of losses reported in Europe, expect the market to react very favorably to the news – much to the delight of Ford investors.

The article 1 Thing to Look for in Ford’s Q2 Earnings originally appeared on Fool.com and is written by Daniel Miller.

Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

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