BOLTING LANDING, N.Y. ( Stockpickr) -- Ford Motor ( F) is slated to report its second-quarter 2010 results on Friday morning. The automotive company is expected to earn 40 cents a share on revenue of $29.79 billion. In the year-ago quarter, Ford lost 21 cents a share on revenue of $27.19 billion. At that time, analysts had expected Ford to lose 48 cents. For fiscal-year 2010, Ford is expected to earn $1.31 a share. In other words, Ford has returned to profitability.There are other positive signs for Ford. Last week, I mentioned that Ford recently announced the repayment of $3.8 billion of debt as well as all dividends in arrears on its 6.5% Cumulative Trust Preferred Securities (FpS). These actions are all made possible by strong sales and cash flow. Furthermore, it sets the stage for a resumption of dividend payments on the common stock. I like the Ford warrants (F-WS), also known as the health care warrants. They were originally issued by Ford to the union to help finance health care plans. Earlier this year, the union sold these warrants to the public. They can now be bought or sold on an exchange just like any other stock. The terms of the warrants are as follows:
Third, should the price of Ford drop dramatically, your potential loss in the common is far greater than the loss on the warrants. There is a caveat. I would consider this to be a very likely concern. Ford is likely to reinstate its common stock dividend in the next year or two. If you own Ford, you are entitled to receive the dividend. If you own the warrants, you are not entitled to the dividend. However, the price of the stock should appreciate in the event that the company issues a common dividend. Thus, it is likely that in an indirect way, warrant holders will also benefit. -- Written by Scott Rothbort in Bolting Landing, N.Y.