Ford Motors posted a surprise $1 billion quarterly profit on Monday and raised its 2011 outlook to "solidly profitable."Toyota and Nissan are also set to report earnings this week; and auto sales data is due out Tuesday. David Silver, equity research analyst at Wall Street Strategies, shared his industry outlook.
“I think we are on the road to recovery, at least for Ford. The quarter was a good quarter—much better than expected,” Silver told CNBC.
He said the auto maker’s North America sales “blew past” his expectations.
“I didn’t expect them to turn in a profit until second quarter of 2010,” he said.
“So all of the cost cutting and all of the efficiency measures that they put into place helped North America. And this is without all of the concessions from the UAW that were given to General Motors or Chrysler before they entered into bankruptcy.”
Silver has a “buy rating” on both Ford and Toyota . He has a $10 price target on Ford and a $100 price target on Toyota within the next 12 months.
However, Silver said 2010 is not going to be much better than this year for automakers in general.
“We’re going to see a little bit of an increase. But if you take out cash for clunkers, September is back to where we were in June so you just saw a little jump out—and now we’re back to where we were beforehand,” he said.
CNBC Data Pages:
Silver and his family own shares of Ford, but doesn’t own shares of Toyota.