Ford's Sales Performance Will Drive An Earnings Beat

Apr.17.14 | About: Ford Motor (F)

Summary

Ford's stock price is nearly flat since its 4th quarter earnings announcement.

Ford's U.S. sales scared many, but investors must look globally.

Based on sales volume, Ford has a good opportunity to beat earnings.

Ford's (NYSE:F) earnings announcement for Q1 2014 is fast approaching. The company's stock has barely moved since late January.

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Source: Yahoo Finance

Analysts are expecting 31 cents per share in what is expected to be a year of transition into new products.

Source: Sentieo

At the heart of Ford's earnings will be its ability to generate revenue. On revenue, Ford is expected to generate flat sales for 2014, therefore a safe expectation for Q1 is zero sales growth.

Source: Sentieo

In the United States, bad weather was to blame for Ford's bad January and February sales. While this may cause people to worry to about the company's financial performance, I believe investors should review multiple markets to see how sales are performing. To do this, I reviewed Ford Corporate web pages for the United States, India, China, and Europe. Additionally, I captured the past 15 months of sales data.

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In order to better understand these numbers on a quarterly basis, I condensed the data.

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Despite rough weather in the U.S., Ford managed to sell 8.84% more vehicles in these markets in the first quarter of 2014 versus the same quarter a year ago. Does this mean that Ford's revenue will increase by 8.84%? Doubtful.

A vehicle sells in the U.S. at a different premium than in China or India, however, I believe enough sales growth has occurred internationally to make up for Ford's domestic performance.

Disclosure: I am long F. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.