Ford Motor Co.'s Secret Weapon Pulls Through Again
Ah, Ford Motor Company's (NYSE: F) secret weapon. The entity responsible for some of the most misguided bear arguments out there, and also responsible for the vast majority of company profits outside of its North America region, is none other than Ford Credit. The interesting thing about Ford Credit is that it's an incredible source of profits for the company, but that can quickly turn sour if used vehicle prices plummet faster than expected. Let's take a look at the stronger than expected quarter Ford Credit posted, and if used pricing concerns remain.
Just to put in perspective how important Ford Credit is to the company's overall business, here are a few figures to digest. Investors know North America is the profit engine, hands down, and the region generated $2.2 billion in pre-tax profits during the second-quarter 2017. South America and the Middle East & Africa regions posted respective pre-tax losses of $185 million and $53 million. Europe and Asia Pacific mustered together small respective pre-tax profits of $88 million and $143 million.
How does Ford Credit compare, you ask? Ford Credit generated pre-tax profits of $619 million during the second-quarter. Not only is that more than all of Ford's regions outside of North America combined, its $219 million pre-tax profit increase over the prior year was more valuable to the bottom line than any region outside of North America generated in total.
Source: Fool.com
Ford Motor Co. Stock
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