Ford Atlas concept pickup truck
Ford Atlas concept pickup truck IBTimes/Angelo Young

Ford Motor Company (NYSE:F) is expected to post a 28 percent increase in earnings for the last three months of 2012 compared to the same period in the year before, as a rebounding American auto market, wider operating profit margins for U.S. sales and improved performance in China offset declines in Europe and lackluster margins in Latin America.

The Dearborn, Mich.-based automaker will release its fourth-quarter and full year earnings statement on Tuesday before U.S. stock markets open.

On average, analysts polled by Thomson Reuters expect Ford after-tax operating income for the fourth quarter to come in at 25 cents per share, or about $1 billion, on revenue of $33 billion. Revenue for the second-largest U.S. auto company is expected to be down 1.3 percent. In the fourth quarter 2011, Ford sales were $32.6 billion and operating income was 20 cents per share, or $797 million. For the full year, Ford is forecast to post an 11 percent decline in earnings per share compared to the year before, to $1.35 per share from $1.51. Fiscal 2012 revenue is expected to hit about $125 billion, compared to $136 billion the year before.

The company has reported 14 consecutive quarters of profit and has widened margins thanks to the success of its One Ford restructuring program. The company has also started to sell the same models worldwide to offset the costs of region-specific versions of the same vehicle, which has helped improve profit margins. The restructuring plan is part of Ford’s efforts to reverse its shrinking U.S. market share.

“Even as global demand begins what we expect to be a multiyear uptrend, the company has worked to prune its product portfolio to focus on its Ford and Lincoln brands,” said S&P equity analyst Efraim Levy.

U.S. sales volume increased 6.5 percent in November, led by a 15 percent hike in car sales and growing demand for its hybrids. December sales were the best since 2006.

“(Global) retail sales likely finished the year at 11.8 million vehicles, representing a 15 percent increase over last year,” said Erich Merkle, a sales analyst at Ford, during a conference call earlier this month. “Much of the retail strength came at the back half of the year.”

Investors chased this strong end to the year, boosting Ford’s share price 32 percent in the last quarter.

Earlier this month the company doubled its dividend to 10 cents a share, an indication of confidence for 2013. The company started paying dividends again in December 2011 for the first time in five years and after three years of declining annual revenues linked to the subprime mortgage meltdown that battered performance in the auto industry.

In December, Ford announced it was investing $773 million to expand production capacity in southeast Michigan as part of its commitment to invest $6.2 billion in manufacturing infrastructure in the U.S. by 2015.

The outlook for 2013 is starting out positive, as American consumers are expected to buy 1 million more vehicles than last year’s 14.4 million.

“We see Ford’s total revenue advancing nearly 10 percent in 2013, as expected healthy U.S. and Chinese growth outweighs weakness in Europe and slowing growth in some other regions,” said Levy.