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Am I the Only One Floored by Ford?

Marek Fuchs

The business-media manifest says to report earnings vs. expectations dryly, and publications have done this by rote a billion times. Use the same words, same tone. Plug in a new company, new numbers. It's a financial Mad Lib. But once in a while a report so outpaces expectations that the common language and tone do not suffice.

Which brings us back, with awe, to Ford. Excluding items, Ford F, operating in a troubled and competitive industry that includes General Motors GM, Toyota TM and Honda HMC, earned 20 cents for its first quarter when a loss of 16 cents was expected.

When companies come within a penny or two of expectations, it serves investors just fine for the business media to churn out stories on auto-pilot. But expecting a 16-cent loss and emerging with a 20-cent profit in this economy? That caused weakness in The Business Press Maven's extremities. Yet look at how many news outlets greeted it with a shrug?

Reuters sleepwalked through a lead that gave no indication of how hot this report was:

"Ford Motor Co (F.N) posted an unexpected quarterly profit on Thursday, led by strong results in Europe and South America and a narrowing loss in North America, sending its shares up nearly 8 percent. The automaker also cut its second quarter North American production plan and said it would offer more targeted buyouts to union workers at specific plants after getting about 4,200 workers to accept recent offers to leave the company."

"Ford Motor (NYSE:F) reported an unexpected improvement in earnings on Thursday and said it still planned to return its core North American carmaking business to profitability next year in spite of the weakening US economy."

And in a typical summary, Ford's report was nothing more remarkable than a "return to profitability" to The Wall Street Journal:

"Ford Motor's stock gained 11% at early afternoon, after the auto maker reported a return to profitability for the first quarter."

Then, this morning in an article exclusively about Ford, the Journal merely mentions in the lead that they "exceeded Wall Street expectations."

Look: Ford is not without concerns going forward. The company spoke with ample caution about the rest of 2008. But this was a big beat by a company that has a recent history of surpassing expectations, even in light of challenges, and showing improvement on a year-over-year basis in a growing string of quarters (six of them). CEO Alan Mulally, who came from Boeing, might just be doing something right here, and if the business media aren't recognizing this in their word choice, they are not properly alerting you, the savvy investor.

In using the adjective "astonishing" right in the lead, The New York Times' story was a welcome departure from most other coverage:

"The Ford Motor Company said on Thursday that it earned $100 million in the first quarter, a pittance compared with the $15.3 billion it lost in the previous two years but an astonishing improvement given a slump in the United States market that has ravaged sales of its most lucrative vehicles."

That's more like it.

Now I have try to rest, to get the feeling back in my extremities.