DETROIT (Reuters) - Ford Motor Co (F.N) reported second quarter profit that was weaker than expected as the company said sales in the United States and China did not match company expectations.
Ford reported net income of $1.97 billion, or $0.49 per diluted share, versus $2.16 billion or $0.54 per share a year ago. Its earnings excluding one-time items was $0.52 per share versus analyst expectations of $0.60 per share.
Which is crazy when you consider how much investment GM has throw into it's recent spat of cars.
Still a great result but falling when compared to last year 2Q is not good at a time of record F150 sales! As of this post Ford (NYSE) is down 8% in premarket trading.
These are Q2 results, it was a relatively quiet quarter for both Ford and GM; "investment" is amortized.
The forward guidance is what has the markets spooked, notice GM is down significantly too. I've been calling this "Peak Auto" for 6 months, where it goes from here is the unknown.
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Trying to piece the numbers together, looking a Ford vs. GM, looks like in NA:
Be interested to see results in 5 years or so when both Cadillac and Lincoln are farther down their path and hopefully turning meaningful profits (i.e. BMW/Mercedes/Audi level or even half that as it will take a lot longer to get worldwide acceptance of our American brands).
I think it's fairly clear that Ford is about to lose significant ground to GM in both sales and profitability. The article already said Ford expects sales to drop further in the second half of the year. I'm guessing their fleet sales contracts are mostly fulfilled. Unless they open the incentive taps they're going to be doing the pain sales-wise. And they still need to get their car lineup updated!
"I'm guessing..................." You probably should have stopped there, but whatever............
Ford Cars are down 8.9% YTD, GM Cars are down 9.1% YTD ~ If gas goes up and/or the economy tanks, GM will have a slightly fresher car portfolio, but both companies would be screwed profit-wise.
And if Ford's fleet orders are mostly filled-out, and they are going to sell more retail with higher incentives like GM has been doing?................
Ford's turn around in Europe s impressive. Their business over there seems to be ahead of FCA and GM but behind PSA. That said, their business is weak in the US compared to major players such as Toyota, Honda and GM due to their reliance on the F150, and Toyota like strategy of not replacing but updating platforms is going to catch up with them soon or later when those platforms have to be built from the ground up. That weakness in China is never good, and we have no indication of their state in South America Africa, India and to a lesser extent Korea, Japan, Australia..
Buy low when you see an upside. Of the two, GM has the bigger upside.
But don't kid yourself: when the cars are sold, they're definitely not gone into the ether. If so then why does Toyota have such good resale in what are now dull-as-drywall offerings?
GM learned its lesson in 2008-true profitability is a long game. You need to produce no-excuses product, and you need to sell it in a no-excuses manner. They have mastered the first one, they have showed commitment to the second one. However long it takes, the third one will follow, if they stay the course. Product-wise, anyone could see that Ford was in trouble as soon as the F-150's weight and FE numbers were revealed-they sunk a whole lotta cash into minuscule results.
I think GM has the bigger up-side too, but I also think they have the bigger down-side.........
And if GM going up was a "jimmie" then we should be backing-up the truck at $30.80/share, but if that was the case it wouldn't be trading at $30.80/share.
But don't kid yourself: when the cars are sold, they're definitely not gone into the ether. If so then why does Toyota have such good resale in what are now dull-as-drywall offerings?
Toyota has good resale because they are a known/proven reliable product long-term, their prices hold high, because of strong demand, not small supply (which is what GM is attempting to do).
GM learned its lesson in 2008-true profitability is a long game. You need to produce no-excuses product, and you need to sell it in a no-excuses manner. They have mastered the first one, they have showed commitment to the second one. However long it takes, the third one will follow, if they stay the course. Product-wise, anyone could see that Ford was in trouble as soon as the F-150's weight and FE numbers were revealed-they sunk a whole lotta cash into minuscule results.
GM sunk a lot of cash into the Malibu, ended up with a finished product that was not only heavily, mediocre at best, then 3 years later it comes out with another new version, only to get sales back up to about were they were in 2012; seems like a lot of cash into miniscule results, on a segment out of favor no-less?
The F150 has reason for being heavier, just like the Ram, but not necessarily the same...............
As far as arguing about Ford vs. GM stock being down, I wouldn't waste to much breath on arguing over the stock markets propensity to over-react. Look at Brexit, the entire market tanked and within a week it was fully recovered and then some. Ford will probably be back to where it was in a week.
And as far as fleet sales between Ford/GM all we know is GM parted ways with some sales. We also know Ford said that they pulled forward fleet sales from the second half. Those two sentences are all we know of the whole fleet situation. We don't know if Ford took those customers or another competitor did. We DO NOT KNOW that Ford is making profits or not on these contracts if they did get them. And if they are making profits, it could be more of a case of GM turned away these low profit contracts (I don't think anyone ever said GM wasn't making $$ on these contracts) and these companies had no place to go and no choice but to pay more $$ for cars at Ford, Toyota, Hyundai, etc.. No magic bullet that Ford has, just better leverage (if they are making any more profit than GM did, we don't know).
And yes, I should not have brought it up in the first post -
And that profit margin for Ford NA kinda blows a hole on VOD's insistance
that F150 is a black hole, there's no way you can have those kind of fleet
percentages in the first two quarters and still end up with an average 12.1%
return without F150 and the other large vehicles being highly profitable.
Both companies rely heavily on their North American divisions to deliver strong profit.
I've given up worrying about europe and ROW, those market blow and cold.......
I'm wondering if Ford NA also took a hit last quater for completing new Super Duty
or whether that will be held over to Q3 results.....I'm thinking it has to be a serious amount...
GTP: if Ford front-loaded their fleet numbers right after GM announced they're reducing theirs, it's pretty obvious they took the majority of those fleet sales from GM.
Post up some proof other than it looks like one said something after the other one did nonsense. You are just as much of a heckler and post spammer as those you champion against.
Hard to sugarcoat these results...Profit is never a bad thing but these numbers have gotta be a big letdown for the Ford faithful. Maybe fleet dumping isn't the brilliant move as some have claimed.
I am one of the biggest GM fans out there and I didn't even think they would earn more than Ford in Q2 (and not by just a little).
so happy to be wrong.
I guess the all important market-share didn't win out this time huh
"On an adjusted basis — which is what analysts care about — earnings came to 52 cents per share of F stock. Analysts on average were looking for earnings of 60 cents a share, according to a survey by Thomson Reuters. That’s a big earnings miss." - InvestorPlace
There is no need to sugar coat the results, they were disappointing. The really bad news for Ford stockholders is projected growth going forward:
"Worse, the automaker said U.S. sales are expected to fall in the second half, putting Ford’s full-year forecast at risk. Ford said next year’s U.S. sales could be even softer."
Ford better hope gas prices dont shoot up...It could get ugly real quick if those F-150 numbers dip. I know people could say the same about GM, but with their updated car lineup (and some new crossovers coming within a year) I think GM are in a better situation right now to weather a possible storm.
It'll be interesting to see how the rest of the year plays out between Ford and GM. On one hand, GM has kept the same, steady forecast for the remainder of 2016. On the other, Ford is claiming that the auto industry is leveling or slightly contracting and expects their 2016 sales to fall accordingly. I wonder which company is correct? Or are they both correct? This appears to be the first test in both of their strategies...
x2. As is usually the case, Ford's guidance sent their stock down more than their results. Cheap fuel will continue to hinder Ford's numbers (i.e. Ecoboost initiative) more than GM's (V8 mania) for the balance of 2016.
On another note: Bob Lutz wrote a great column on Cadillac's woes in the September issue of Road & Track. That and the data table on each year ('53-'16) of Corvette's performance are worth the price of the issue.
Ford's guidance drove down their stock some today as well as GM's. Ford's results drove their stock down some more, while GM's better than expected results were offset by Ford's guidance.
The cost for design and tooling for the Silverado/Sierra and Colorado/Canyon is how much less than the design and tooling to make the F150 and upcoming SD that comes with the same aluminum cab? F series had sales that went up last month while GM went down for full size trucks. Ford sells less globally, yet comes close to the same level of profits as GM. Doesn't seem like Ford has any chance of being around a year from now or maybe VoD can only see negative about anything Ford does and exaggerates as often as he can.
If I was shopping for a mid size sedan I would give consideration to the excellent choices of both the Malibu and Fusion. So far the Fusion is selling more. All new Camaro and yet the Mustang continues to sell better. Overall it doesn't seem like GM's fresher choices are translating into better sales.
Ford's passenger trucks have been losing marketshare to GM for a while now. They're up in sheer numbers less than GM. If something has happened recently to change that then fine-I'll retract what I said.
But I'm not going to bother and dig it up for the sake of a side skirmish in a war GM clearly has gained the upper hand in.
Man, some of you people act like a nuclear warhead will detonate over your house if you say something nice about Ford. The thing about selling cars is, both GM and Ford can be winning at the same time.
Ford's numbers illustrate how not having a strong, high margin mid-level brand can hurt earnings.
Buick contributed to GM's profits as did GMC with it's mid level volume and high ATP/profit margins (and that is with a limited, aging product line)
Ford needs Lincoln to increase sales to boost the bottom line.
Test will be if GM gets smart and focuses on building the Buick/GMC/Holden/Opel/Vauxhall lineup globally and put Ford permanently in the rear view mirror.
That is GM's "secret weapon" with hundreds of Billions in growth potential over the next 10 years.
How does everyone but me know what kind of profits the F-Series, Canyon, Sierra, fleet sales, Buick, GMC, etc. make? Last I heard JDN wants to break out Cadillac profits in a couple of years, but otherwise all Ford and GM N.A. profits are one big lump that we get told by "experts" on Wall Street (the same chumps who tell us Brexit is the end of the world and then in a week the market is back to all time highs) that it all comes from trucks?
I need to know what and where everyone gets this info, I want to know too!
Based on comments in this thread, I would assume GM makes $15,000 on every new Cruze, and Ford breaks even on the Focus.
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