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September 17, 2004
Good News

GOOD NEWS!

CNN: Ford ups guidance
MSNBC: Ford raises earnings outlook
Reuters: Ford lifts profit forecasts
Newsday: Ford Raises Quarter, Full-Year Outlook
Bloomberg: Ford Boosts Third-Quarter Earnings Forecast to 10C-15C/Share

That is interesting. Should I add Ford to my portfolio?

The Ford Press Statement is upbeat, but in their presentation slides there are some small caveats.

  • Volume has grown, but less than expected
  • External environment has deteriorated
  • Jaguar sales have not lived up to expectation

    • But on the financial side, earnings forecast is 10c/share* higher for the quarter and the year. Total earnings in 2004 will be about $1.95* per share. In the Q2 report Ford expected earnings for 2004 to be only $1.85**. That is a positive trend.

    But what are these asterisks?

    *excluding special items of 25c per share
    **excluding special items of 8c per share

    Oh, guidance in the Q2 was $1.85 minus 8 cent special items. Guidance in Q3 is $1.95 minus 25 cent special items. The boost Bloomberg headlines is minus $0.07 per share.

    Ford is loosing money with each car they make. Profits come only from lending to consumers. With rising interest rates, record consumer debt, problems with Jaguar and 4% lower earnings projections maybe that´s not a BUY. But then:

    Ford shares added 37 cents, or 2.7%, to $14.32 in premarket trading Friday.

    Sigh!

    Posted by b on September 17, 2004 at 14:57 UTC | Permalink
    Comments

    So the question is not if, but when the (still) overrated market will come down – and how to make the best out of a worst case scenario. We’ve had this before, I think, but I find your specific remarks enlightening, Bernhard. Danke (einmal mehr).

    Posted by: teuton | Sep 17 2004 16:03 utc | 1

    Jaguar sales have not lived up to expectation
    Sadly, I can’t deny I wish I could help them out with this.
    The Prius looks like butt, and the promised SUV hybrids seem to me to be missing the point. Besides which, it is generally wise to see how new technologies unfold- I can imagine service bills on hybrid engines are pretty high, and there is so far naturally a dirth of mechanics who can deal with them, anyway.
    The Mini is appealing, but pricey and I hear there are waiting lists. Are SmartCars destined for the American market anytime soon?

    Posted by: æ | Sep 17 2004 16:23 utc | 2

    Berhnard
    BBC: Ford closes Jaguar plant

    Posted by: Cloned Poster | Sep 17 2004 16:44 utc | 3

    @æ

    We plan to launch a variant of the smart forfour onto the US-American market in 2006. However we are not planning to introduce the current model range (smart city-coupé, cabrio, crossblade, roadster, roadster-coupé) and smart forfour there. Decisions will be reached concerning each specific vehicle in relation to the US launch of future smart models which could be available on the market after 2006.

    smart

    Posted by: b | Sep 17 2004 16:49 utc | 4

    We plan to launch a variant of the smart forfour onto the US-American market in 2006.
    great! I hope my ’92 Corolla can make it that much longer… that thing is a frikkin Energizer Bunny, I’m dead surprised to say.

    Posted by: æ | Sep 17 2004 17:08 utc | 5

    For once, I think I actually made the right decision. I’ve owned Ford since 2002, thinking that it had to go up. I decided a couple of weeks ago that its fundamentals just weren’t good, so I sold it for a modest profit. Given the uncertainty over the future of gasoline prices (an uncertainty we Americans have been doing our best to ignore), the precarious perch of the dollar (another thing we try not to think about), and the certainty that, sooner or later, the bills from the Bush Administration’s criminally derelict economic policy will come do, I’m not sure about the near-term future of any business selling big ticket items to consumers. I give the economy until mid-2006 if Bush is re-elected. Sooner or later, though, investors in the rest of the world will face reality. That won’t be a good time to be an American.

    Posted by: Anonymous | Sep 17 2004 18:53 utc | 6

    yeesh- that was me.
    æ

    Posted by: æ | Sep 17 2004 19:51 utc | 7

    double yeesh- in a different thread. the whole ‘remember personal info’ thing is being weird.

    Posted by: æ | Sep 17 2004 19:52 utc | 8

    Æ:
    I decided a couple of weeks ago that its fundamentals just weren’t good, so I sold it for a modest profit.
    I think you made the right decision, although the markets have an annoying habit of making my predictions look no better than those made by monkeys banging on keyboards. Still, you and Bernhard are right to point out future problems that could bring down the car companies.
    I believe the day of reckoning will come long before mid-2006, and it won’t matter which candidate becomes president. The economy has become too grotesquely distorted and continues to worsen. When the recession comes and a financial crisis hits, the so-called “Big 3” will be in serious trouble with their only profit-making divisions sinking like a stone.

    Posted by: Anonymous | Sep 18 2004 0:10 utc | 9

    NYT´s Gretchen Morgenson looks at the Good News Texas Instruments had last week.

    Sure, investors are looking for positive results from their companies. But there is a difference between good news from actual operations and good news from gimmicks. Sooner or later, gimmicks run out.

    Posted by: b | Sep 19 2004 9:21 utc | 10

    personally this “good news” has me confused, as the NYT reported recently (two-three weeks ago?) that Ford and GM were cutting production. Oh, I forgot, silly me! whenever companies cut personnel and production, they look better to Wall Street! THAT’s why we have 3 million jobs lost, not just because we have a lousy current President who may well be re-elected by those who are still doing well in their portfolios …

    Posted by: francoise | Sep 21 2004 1:57 utc | 11

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