Investors seek signs of Japan impact on Ford earnings

Reuters (Detroit) - Ford Motor Co (F.N) reports first-quarter earnings on Tuesday and is expected to update an outlook that represents a crucial indication of how well the U.S. auto industry is coping with parts shortages resulting from Japan's March earthquake and tsunami.

Ford's earnings are not expected to be affected greatly by the lack of spare parts from Japan and the ripple effect on the supply chain that impacts suppliers and automakers on every continent.

But investors will be looking for signs of what is to come in the second quarter when the parts shortages are expected to be more acute, which some analysts say will help Ford in relation to its Japanese competitors.

Ford is expected to show net income of $2.12 billion for the first quarter that ended March 31 on revenue of $30.64 billion, according to analysts polled by Thomson Reuters.

Gary Bradshaw, a portfolio manager with Hodges Capital Management in Dallas, which owns about 200,000 common Ford shares, said he likes how Chief Executive Alan Mulally has positioned the company to work through the Japan parts disruptions.

"Mulally made the comment that he didn't think Japan would really affect earnings and I really think that Japan's going to be a small bump in the road," Bradshaw said.

"The whole key in Ford's earnings is they are still able to sell cars in the fuel headwinds we have out there. I think Ford will have a good quarter."

Bradshaw referred to Ford's new fuel-efficient lineup in the face of U.S. average gasoline prices that are nearing $4 per gallon for the first time since 2008.

PLANT SHUTDOWNS

Ford shut a plant in Belgium due to parts shortage, moving up a scheduled shutdown to early April. Ford also temporarily shut its truck plant in Kentucky for a week in early April because of parts shortages.

Ford on Monday said it will idle a plant in Taiwan for two weeks and plants in China and in South Africa for a week because of the parts issue.

Ford has yet to give an update on its production estimate for the year since the earthquake. Its most recent guidance on North American production was 710,000 vehicles for the second quarter of 2011.

WILL FORD MEET EXPECTATIONS?

Analyst David Whiston of Morningstar said that in addition to Ford's statements on the future impact from the Japan earthquake, he wants to see if Ford meets analysts' expectations.

Analysts expect Ford to show earnings per share of 50 cents for the first quarter, excluding one-time items.

In January, when Ford reported fourth-quarter earnings, it missed analysts' expectations after a string of quarters in which it easily exceeded them.

This caused a drop of 13 percent in Ford shares that day, to $16.27.

Ford's shares have since slid another 5 percent and closed on Monday at $15.54.

A year ago, Ford shares were trading at $14.50.

Ford shares had been one of the best-performing stocks from late 2008 until January, when they went from just above $1 to nearly $19.