Posts Tagged ‘f’

  • Ford Earns 39 Cents Per Share
    , April 27th, 2012 at 8:40 am

    Ford earned 39 cents per share which is four cents more than Wall Street’s forecast:

    Ford reported net income of $1.4 billion, 45 percent less than the $2.55 billion it earned in the same period of 2011. Revenue declined 2 percent, to $32.4 billion.

    Officials attributed about half of the decline to the company’s tax rate quadrupling from a year ago. In addition, its European business swung to a $149 million pretax operating loss from a $293 million operating profit.

    Excluding taxes and special items, Ford earned $2.29 billion, or 39 cents a share, marking its 11th consecutive quarterly operating profit. That is 19 percent less than a year ago, when it earned $2.84 billion, or 47 cents a share, but higher than Wall Street’s consensus estimate of 35 cents.

    “Our team delivered a solid performance during the first quarter, with particularly strong results in North America, despite a challenging global external environment,” Ford’s chief executive, Alan R. Mulally, said in a statement. “We remain focused on investing for future growth and developing outstanding products with segment-leading quality, fuel-efficiency, safety, smart design and value.”

    Ford earned $2.13 billion in North America, up from $1.84 billion in the first quarter of 2011. The company said that was the highest quarterly profit for the region since at least 2000, when it began reporting North American results separately.

    The improvement was a result of higher sales and prices paid by customers, even as increasing gasoline prices prompted a shift toward smaller vehicles.

    The automaker recorded positive automotive operating-related cash flow for the eighth consecutive quarter, increasing cash reserves to $23 billion from $21.3 billion a year ago.

    (…)

    For the full year, Ford said it expects operating profit and margins in North America to be “significantly higher” than in 2011, allowing global operating profits to be roughly flat. It said operating profit would be higher in the second half than in the first half because of new product introductions and production increases, including plants scheduled to open in Thailand and China.

    “We feel really good about the quarter and what it portends for the rest of the year,” Robert Shanks, Ford’s chief financial officer, told reporters at the company’s headquarters. “It demonstrates not only the much leaner cost structure that we have, but our ability to do well no matter what the customer wants to buy.”

  • Fitch Upgrades Ford
    , April 24th, 2012 at 10:49 am

    More good news for Ford ($F):

    Fitch Ratings upgraded Ford Motor Co to investment grade on Tuesday, marking a key step that brings the second-largest U.S. automaker closer to reclaiming its Blue Oval trademark.

    Fitch upgraded Ford and its captive finance arm to “BBB-” from “BB+” to reflect the improvement in Ford’s finances since its near collapse in 2006. Ford has lowered its break-even point since the last recession and improved its vehicle lineup.

    Still, the agency said Ford also faced the risk of slower-than-expected global demand for vehicles, particularly in Europe.

    “Fitch believes that the work that has been accomplished has put the company in a solid position to withstand the significant cyclical and secular pressures faced by the global auto industry,” the credit ratings agency said in a release.

    Earnings are due out on Friday.

  • CWS Market Review – April 13, 2012
    , April 13th, 2012 at 8:20 am

    That money talks, I’ll not deny, I heard it once: It said, ‘Goodbye’.
    -Richard Armour

    After sliding for five days in a row, the stock market has started to right itself. On the first trading day of April, the S&P 500 closed at a 46-month high but promptly broke up like a North Korean rocket and shed 4.26% in a week. That’s not a major pullback, but it’s one of the biggest slumps we’ve seen in months. Thanks to rallies on Wednesday and Thursday, the market has already made back half of what it lost (in fact, the traceback has been almost exactly 50%).

    What’s most surprising about the market so far in April is the recrudescence of volatility on extremely low volume. Consider this: In the first 64 trading days of 2012, the S&P 500 suffered just one daily drop of more than 1%. In 2011, that happened 48 times. Then suddenly, we had three 1% drops in four days. Yet average daily trading volume last month was the lowest since December 2007. What gives?

    In this issue of CWS Market Review I want to look at why the market has gotten so jittery all of a sudden. But more importantly, I want to take a look at the first-quarter earnings season. Over the next month, 16 of our Buy List companies are due to report earnings. As always, earnings season is the equivalent of Judgment Day for Wall Street. I’m expecting good news for our stocks, but the outlook may not be so sunny for the rest of Wall Street.

    Sorry, Folks. QE3 Is Not Coming

    Part of the reason why the stock market got a sudden case of the worries is what I mentioned in the previous two editions of CWS Market Review. Wall Street has been focused on the March jobs report and first-quarter earnings season. The jobs report wasn’t so hot and the market took its pound of flesh. Earnings season is the next hurdle.

    Interestingly, the stocks that dropped the most during the five-day selloff were often the ones that rallied the most on Wednesday and Thursday. These tended to be cyclical stocks and financials. It’s also interesting to note that the Morgan Stanley Cyclical Index (^CYC) had peaked on March 19th, two weeks before the rest of the market. This means, the cyclicals had already started to erode before the jobs report pullback.

    The stock market was given a boost on Thursday when two Fed officials, Janet Yellen and William Dudley, said that rates will have to stay low for a while longer. That‘s not a big surprise. Let me add a quick note on QE3. Some folks think the weak jobs report will cause Bernanke and his buddies at the Fed to jump in with a third round quantitative easing. Do not believe any of this. We often forget that the C in FOMC stands for “committee” and it’s obvious that the policy-makers are very far from a consensus on this issue. The media has been searching for any hint, no matter how trivial, that QE3 is on the way. It’s not. Plus, the jobs report was hardly a harbinger of a new recession. For now, the talk of QE3 is pure nonsense.

    Although the selloff was initially triggered by the jobs report, it was kept alive by bad news from Europe and China. The yield spreads in Europe (specifically, between any country and Germany) have been inching upward, particularly in Spain. I think it’s somewhat amusing that Monsieur Sarkozy is using the example of Spain to scare French voters from supporting the socialist opposition in next month’s election.

    The wider spreads signal some nervousness from investors but it’s important to note that we’re a long way from the frenzy we had last year. I want to urge investors not to be carried away by these renewed concerns from Europe. The fears of Spain not being able to pay her bills are greatly overblown. Europe will not sink the U.S. stock market.

    Q1 Earnings: The Story Is About Margins

    Last earnings season was disappointing. This time around, investors don’t expect much. The numbers vary but the consensus is that first-quarter earnings will be about the same as they were last year. In other words, zero profit growth. How times have changed. Not that long ago, analysts were expecting double-digit earnings growth for Q1.

    One of the problems facing many companies is that higher fuel costs are cutting into profits. All 10 sectors of the S&P 500 will see higher sales numbers, but at least seven of those sectors will have a hard time turning those top-line dollars into bottom-line profits.

    The story here isn’t that a slowdown is upon us. Rather, it’s that business costs are rising after being held back for so long. Part of this is the cost for new employees, which is a good thing. As I’ve said before, the story here is about margins, not a weakening economy. Even with as much as earnings growth estimates have fallen, the stock market hasn’t responded in kind. That’s because Wall Street correctly sees this as a temporary issue. In fact, the current view is that earnings growth will reaccelerate later this year as Europe comes back online.

    The important point for us is that even with little earnings growth, the stock market is still a very good value compared with the competition. Bond yields have climbed, but they’re still way too low. As long as the migration away from super-safe assets continues, our Buy List will thrive.

    Now I want to focus on some upcoming earnings reports for our Buy List stocks (you can see an earnings calendar here). Unfortunately, not all of our companies have said when earnings will come out yet.

    Expect an Earnings Beat at JPMorgan

    On Friday, JPMorgan Chase ($JPM) will be our first Buy List stock to report earnings. With a 34.86% year-to-date gain, the bank is our top-performing stock this year. That’s not bad for a little over three months’ work. (It’s always a surprise to me who the #1 stock will be.) What’s remarkable is that even with as well as the stock has done, the shares are still going for less than 10 times this year’s earnings estimate.

    Wall Street currently expects JPM to report earnings of $1.14 per share for Q1. That’s down a little from one year ago. That estimate, however, has been climbing in recent weeks while estimates for many other companies have been pared back. I’ve looked at the numbers and I expect a small earnings beat from JPM. But I’ll be curious to hear what CEO Jamie Dimon has to say about the bank’s business.

    Not only is JPM a big report for us, but it’s also a bellwether for the entire financial sector. Jamie Dimon likes to see himself as the unofficial spokesman for the banking world and a lot of investors want to hear what he has to say. JPM even moved up their earnings call so Jamie could hit the stage before Wells Fargo ($WFC).

    I agree with Dimon’s assessment that the last earnings report was “modestly disappointing.” One of the concerns this time around is investment banking, but Jamie has been clear that the division will rebound. For Q1, trading profits will probably be down from a year ago but better than Q4. This is a solid bank and I was particularly impressed by the 20% dividend increase. Bottom line: I’m sticking with Jamie, and I’m raising my buy price on JPMorgan Chase from $45 to $50 per share.

    Johnson & Johnson: 50 Straight Years of Dividend Increases

    Next Tuesday, we’ll get two more earnings reports—Johnson & Johnson ($JNJ) and Stryker ($SYK). I’m afraid that J&J has been a weak performer this year. In January, the healthcare giant said that earnings-per-share for 2012 will range between $5.05 and $5.15. Wall Street had been expecting $5.21.

    J&J has been dogged by a series of quality control problems, and the stock has lagged. Later this month, Alex Gorsky will take over as the new CEO. I think that’s a good choice particularly since he helped the company tackle its internal problems. Wall Street’s consensus for Q1 is for $1.35 per share which is exactly what Johnson & Johnson made one year ago. The stock usually beats by about three cents per share, but I’m not going to get worked up by a result that’s within a few pennies of $1.35. What I want to see is solid proof of a turnaround, although I realize it may take some time.

    The best part about J&J is the rich dividend. Going by Thursday’s close, the stock yields 3.55%. But the yield to investors is probably even higher. Later this month, I expect the company to announce its 50th-straight dividend increase. But coming after January’s lower guidance, the quarterly dividend will probably rise from 57 cents to 60 cents per share. If that’s right, J&J now yields 3.74%. I’m keeping my buy price at $70.

    Stryker Is a Good Buy Up to $60

    Shares of Stryker ($SYK) haven’t done much for the past several weeks which is puzzling because the business has been strong. Stryker has said that it sees “double digit” earnings growth for 2012. I doubt they’ll have trouble hitting that forecast. In fact Stryker is probably low-balling us, but that’s understandable since the year is still so young.

    For Q1, the Street expects earnings of 99 cents per share which sounds about right. Stryker rallied last earnings season after they met expectations. The business tends to be very stable. I think the stock is a good value here and I’m raising my buy price to $60 per share.

    Before I go, I want to highlight some other good values on the Buy List. Among the financials, AFLAC ($AFL), Nicholas Financial ($NICK) and Hudson City ($HCBK) are all going for a good price. I also think that Ford ($F) has drifted down to bargain territory as well.

    That’s all for now. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

    – Eddy

  • Ford Posts Best March Sales in Five Years
    , April 3rd, 2012 at 12:15 pm

    From the press release:

    Ford Motor Company posted its best March U.S. sales month since 2007 – with the Ford Fusion recording its best month ever, Ford Focus and Ford Edge achieving their best March ever and the F-Series showing the strongest March sales in five years.

    Total company sales totaled 223,418 vehicles for March, a 5 percent gain over year-ago levels. Retail sales increased 11 percent for the month.

    For the first quarter, Ford Motor Company’s sales were up 9 percent versus year-ago levels, totaling 539,247 vehicles sold. The increases were driven by the popularity of Ford’s most fuel-efficient models posting record sales months.

    “Rising gas prices continued to drive strong customer demand for Ford’s fuel-efficient vehicles throughout March and the first quarter,” said Ken Czubay, vice president, U.S. Marketing, Sales and Service. “Ford is answering the call with what we call the power of choice – a full family of cars, utilities and trucks that offer leading fuel economy in their classes.”

    March sales highlights:

    * Fusion set an all-time monthly sales record, with 28,562 vehicles sold.

    * Focus delivered its best March sales performance ever, selling 28,293 cars.

    * F-Series sold 58,061 for the month – a 9 percent increase versus last March and F-Series’ best March sales performance since 2007. EcoBoost accounted for 41 percent of the F-150 retail sales, with all V6 engines comprising 56 percent for the month.

    * The Ford Edge had it best March sales month ever, with 14,058 vehicles sold.

    * Ford began selling its Police Interceptor Sedans and Utilities at the end of March.

    During the first quarter:

    * Car sales at Ford Motor Company were up 8 percent. The fuel-efficient Focus was the biggest seller among Ford’s car lineup, with sales up 78 percent during this period, with 66,043 vehicles sold.

    * Utility sales totaled 150,415 vehicles, a 6 percent increase versus year-ago levels. Escape sales were up 5 percent, making it the strongest-ever first quarter start for Escape – America’s best-selling utility.

    * Ford Motor Company truck sales increased 11 percent, with 195,807 vehicles sold. F-Series pickups – America’s top-selling truck for 35 years – posted sales of 143,827 vehicles for the quarter, a 14-percent increase versus the same period in 2011.

  • The Turnaround at Ford
    , March 31st, 2012 at 7:04 pm

    This is from a NYT review of “American Icon: Alan Mulally and the Fight to Save Ford Motor Company.”

    In 2008, the Ford Motor Company seemed caught in a death spiral.

    The company was hemorrhaging cash — more than $83 million a day — as the bottom fell out of the car market. In late autumn, Ford’s stock price bottomed out at $1.01.

    Move forward three years. For 2011, Ford turned a net profit of $20 billion on sales of $128 billion. It distributed profit-sharing payments of about $6,200 to each of 41,600 eligible employees. On Friday, its stock closed at $12.48.

    (…)

    First, Mr. Mulally knew that Ford could not hope to improve its market performance without simultaneously changing its culture. Some of the book’s most interesting passages deal with his efforts — often one person at a time — to improve accountability and to foster commitment among executives.

    Mr. Mulally’s chief instrument here was data-driven management, in which each executive was responsible for consistently knowing and reporting how his — very few women appear in this story — department was performing. Concentrating on consistent metrics, he argued early on, would focus managerial attention on the big picture while increasing transparency.

    He eliminated all corporate-level meetings except for two he introduced: the weekly, mandatory business plan review, when the senior team reported its progress on specific goals, and the special-attention review, when executives took up issues needing in-depth consideration. Over time, both meetings — which occurred daily in crucial periods — would become the highway on which Ford’s leaders drove change.

  • Good Earnings from Moog, Not So Good from Ford
    , January 27th, 2012 at 8:53 am

    More earnings news for our Buy List. This morning, Moog ($MOG-A) reported earnings of 80 cents per share. That’s six cents more than estimates. Moog reiterated its full-year guidance of $3.31 per share. Note that Moog’s fiscal year ends in September.

    “We are off to a great start for fiscal 2012,” said John Scannell, CEO. “Our first quarter sales are up nicely and earnings per share were better than our forecast. Sales in four of our five segments were up in the quarter as were profits. It is a great foundation for a year in which we anticipate we will deliver record sales and a 12% increase in earnings per share over fiscal 2011.”

    Ford ($F) reported earnings of 20 cents per share which was five cents below estimates.

    Ford earned $13.6 billion in the fourth quarter, due to a decision to move deferred tax assets back onto its books. Without that change, the company’s pretax operating profit totaled $1.1 billion, or 20 cents per share, missing analysts’ forecasts of 25 cents.

    The company lost money in Europe and Asia in the fourth quarter. But its North American operating profit rose 33 percent to $889 million.
    “The quarter was really driven by North America,” Chief Financial Officer Lewis Booth said.

    Booth also said November flooding in Thailand, which affected its parts suppliers, had a greater impact than the company expected. Ford lost 34,000 units of production in Thailand and in South Africa, which relies on Thai-made parts. He said the company also saw higher costs for steel and other commodities. Ford spent $2.3 billion more on commodities in 2011 than the prior year, or $100 million more than it had forecast.

    Europe’s debt crisis weighed on car sales in that region.

    For the full year, the U.S.-based company made $20.2 billion, or $4.94 per share. Without the accounting gain, it earned $8.76 billion, or $1.51 per share, its highest operating profit since 1999. Full year revenue rose 13 percent to $136.3 billion.

    The shares look like they’re going to open about 5% lower this morning.

  • Ford Drops on False News
    , January 10th, 2012 at 12:19 pm

    Earlier today, CNBC incorrectly reported that Ford ($F) was going to post a loss for 2011.

    The stock plunged about 35 cents in a matter of minutes. As you can see in the video, the reporter corrects himself and notes that Ford is only reporting in its Asia-Pacific and Africa region. The company also said that it expects to report earnings of 26 cents per share for Q4.

    This is yet another reason why I steer clear of day-trading. Shares of Ford are currently off their lows of the day.

  • Ford’s Sales Reach Four-Year High
    , December 30th, 2011 at 10:01 am

    From the AP:

    Ford Motor Co. said Friday that its U.S. sales this year have passed the two million mark. It’s the first time that’s happened since 2007.

    Sales through November were up 18 percent from the first 11 months of 2010. Ford said sales of small cars this year are on pace to rise more than 20 percent, while utility vehicles are tracking up more than 30 percent.

    On Dec. 1 the company said it had sold nearly 1.94 million vehicles in 2011. In December of last year, it sold 190,976 vehicles. Sales totaled 166,865 vehicles in November.

    Ford sales have been improving this year as people replace the cars and trucks they held onto during the economic slump. In November buyers were lured by deals, improving confidence in the economy and the need to trade in older cars. An early blitz of holiday advertising also helped convince some people that it was a good time to buy.

    Ford ($F) had a rough 2011 but the stock closed yesterday at $10.68 which is 6.7 times the earnings estimate for 2012.

  • After Five Year Absence, Ford’s Dividend Will Return
    , December 8th, 2011 at 12:13 pm

    Ford ($F) just announced that it’s going to pay a dividend of five cents per share. The dividend is payable March 1, 2012 to shareholders of record on Jan. 31, 2012.

    The Board of Directors of Ford Motor Company today declared a quarterly dividend of 5 cents per share.

    “We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow,” said Bill Ford , executive chairman, Ford Motor Company. “The board believes it is important to share the benefits of our improved financial performance with our shareholders. We are pleased to reinstate a quarterly dividend, as it is an important sign of our progress in building a profitably growing company and our confidence in the future.”

    Lewis Booth , Ford executive vice president and chief financial officer, said the company’s strong liquidity and balance sheet improvements provide the underlying financial strength to resume paying a quarterly dividend.

    “Building a strong balance sheet that supports our growth plans remains a core part of our One Ford strategy,” said Booth. “We have demonstrated our capability to finance our plans and we are confident that we can begin to pay a dividend that will be sustainable through economic cycles.”

    A five-cent dividend is a puny portion of Ford’s annual profit. The company will earn about $1.87 per share this year and it’s expected to earn another $1.62 per share next year.

    From 2002 to early 2006, Ford had paid a quarterly dividend of 10 cents per share. Then Ford cut it five cents for one quarter; then they got rid of it entirely.

  • Ford’s Earnings: Good But Could Be Better
    , October 26th, 2011 at 10:06 am

    Ford Motor ($F) reported earnings this morning of 46 cents per share. That was two cents better than Wall Street’s consensus. This is their tenth-straight quarter of profitability.

    Fundamentally this was a solid report, but there were a few weak spots. Let’s go over some of the details. For the quarter, the company netted $1.65 billion which was slightly less than the $1.69 billion from last year’s third quarter. Last year’s per-share result was 48 cents.

    Ford’s sales jumped to $33.1 billion which is a 14% increase over last year. That’s a really good number. Wall Street was expecting $30.5 billion. Their share of the U.S. market ticked up to 16.8%. The problem, however, is with profit margins. Due to the plunge in commodity prices, particularly for copper, Ford said that its margins may fall to 5.7%. For me, the key stat is that if you strip out Ford’s losses on copper hedging, their profits rose by 12%.

    The odd thing about Ford’s business is that they borrowed a ton of money before the economy fell apart. The good news is that they had the cash to withstand the recession. The bad news is that they still have a ton of debt. The good part, again, is that they’ve been able to pay that down. Ford now has $12.7 billion of automotive debt.

    Ford was also hurt by an operating loss in Europe of $306 million. The company also said that it’s not going to start paying a dividend just yet which is probably a smart move.

    Overall, I like this report. The basics of Ford’s business are doing well. They were hurt by problems in Europe and by commodity prices, neither of which they can control. Now that the union deal is done and their credit has been upgraded, Ford has shown that it can deliver earnings.

    The stock is down today which is probably due to the warnings of lower margins, but that’s not a long-term issue. Ford continues to be a very good buy.

    Stay tuned for AFLAC ($AFL) after the close.