Ford Trucks Will Continue Driving Profitability (And Funding Dividends)

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About: Ford Motor Company (F)
by: BAM Investments
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Summary

Ford's U.S. sales decreased an estimated 4.9% to 580,251 units in Q3 2019.

Despite the year-over-year volume drop, Ford is selling the right sales mix as Ford’s truck and SUV mix climbed to 87% of total sales compared to only 82% in the.

This mix is driving bottom-line growth as second-quarter 2019 Automotive EBIT increased 19% year-over-year.

While cash is expected to tighten due to restructuring costs, management is committed to the dividend, and the changes will better position the company for the long term.

Investment Thesis

Ford (NYSE:F) posted growing automotive profit in the second quarter of 2019 despite declining sales and the trend appears to be continuing with the release of Q3 sales numbers. With the