Ford: Pedal to the Metal

NEW YORK (TheStreet) -- Ford  (F) reported third-quarter earnings on Thursday morning, again beating analysts' expectations in both revenue and earnings. 

But perhaps, more importantly, the company proved that its European operations are improving. 

For the third quarter, Ford posted a pre-tax loss of $228 million in Europe. While that may seem like a large amount, consider that in the same period last year, the company lost $468 million in the region. 

The multiyear goal from CEO Alan Mulally was to break even in the region by mid-decade. At this pace, with the third-quarter loss falling 52% year over year, investors could be looking at more than just covering the costs of doing business. 

Chief Financial Officer Bob Shanks confirmed this possibility, saying, "I think we could turn a profit -- not just break even -- by 2015." 

He added that along with cost-cutting and operational improvements in Europe, "there are signs we're seeing some markets return to growth." 

Shares of Ford, which briefly rallied over $18 for the first time since January 2011, have been on a tear this year, up over 37%.

With revenue overall up roughly 12.5% and earnings per share up 12% from the same period last year, Ford seems to be doing all the right things. 

In January, management announced that it would double the company's quarterly dividend to 10 cents a share from 5 cents. I wouldn't be shocked to see a 15 cent or possibly 20 cent quarterly dividend announcement when fourth-quarter and full-year results are reported later this winter. 

Assuming the price remained the same, the current 2.25% dividend yield would increase to 3.4% with a 60 cent annual payout and balloon all the way to 4.5% on an 80 cent annual dividend. Obviously, a 15 cent quarterly (60 cent annual) payout would be the more likely outcome.

If you liked this article you might like

Stock Futures Trade Flat as Balance Sheet Decision From Fed Is Awaited

Fed Decision, Mexico Earthquake - 5 Things You Must Know Before the Market Opens

Volkswagen Tiguan Named Top Compact SUV Under $35,000

Stock Observations; Reviewing Equities: Doug Kass' Views

Here Are 7 Eco-Friendly Cars to be Featured at Frankfurt Auto Show