It still sounds a little strange to say it, but making a profit and improving the business are becoming the norm in Detroit.
After years of failing to shoot straight, the Big 3 are not only back in the black, but growing.
The latest proof coming from the 2Q profits posted by Fordand Chrysler.
Admittedly, they are in far different places, but both give investors, customers reasons to be pleased with where the companies are headed.
The Dearborn, Michigan automaker beat the street by a nickel with a profit of $2.9 billion. With revenue of $35.5 billion, Ford had a strong second quarter powered by solid sales in North America and higher transaction prices. But the most interesting news from for Ford is the guidance it now gives for the full year, where it expects to better last year's profit ($8.3 billion), automotive cash flow ($4.4 billion) and margins (6.1%). To quote Ford CEO Alan Mulally, "We are now in position to exceed our performance last year and that's a heck of a story."
The numbers at Chrysler are far smaller than what Ford posted in 2Q, but given how far Chrysler has come, they are still impressive. Chrysler posted a modified operating profit of just over $500 million. Its net loss of $370 million is attributed to the cost of paying more than a half billion dollars in government loans. Cleaning up the balance sheet is why Chrysler lowered its full year guidance to break even or a light loss. While those numbers may not blow away a lot of people, remember how Chrysler was left for dead a couple years ago. Restructured, Chrysler is growing sales (up 19% in 2Q) and selling cars and trucks at higher transaction prices. To quote CEO Sergio Marchionne, " We are continuing to establish credibility by fulfilling our commitments."
Ford's CEO Alan Mulally will be on CNBC's Strategy Session Tuesday, July 26th at 12:10pm/et to discuss today's earnings report, and what he calls, Ford's "Heck of a story."
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