Lackluster U.S., China Sales Impact Ford Motor Profit

[El Kabong]

"Ford Motor Co (F.N) reported weaker-than-expected profit in the second quarter, and said its full-year earnings forecast was at risk with U.S. auto sales expected to fall in the second half, sending shares tumbling in premarket trading.

"Auto sales in the United States and China were lower than anticipated in the quarter, and Ford reported its first quarterly loss in the Asia Pacific in three years.

"Ford shares shed 7 percent to $12.87 in premarket trading."

More at the link:

https://finance.yahoo.com/news/ford-motor-profit-falls-u-111836898.html

[El Kabong]

Hopefully this puts to rest any fretting over GM's recent decision to cede much of the fleet market to its crosstown rival. If Ford is already predicting weaker second-half NA sales then I'm guessing it knows its annual sales contracts are up. I predict GM will begin increasing its overall sales lead going forward, unless Ford opens the taps on incentives across the board. Either way, it appears Dearborn's attempt to steal GM's thunder have not succeeded.

Edited July 28, 2016 by El Kabong

[surreal1272]

Definitely not good for their stockholders.

[ccap41]

Year to date the General's stock has tumbled 8.8% to Ford's 10% so neither are kicking any ass right now. But both pay a healthy dividend so as long as they're both profitable I don't think the shareholders will be too upset about one quarter. 

[Cmicasa the Great]

This happened and I knu it would. I'm sure fanbois of Ford are now trying to figure out how to respond to the over $1B difference in selling more to fleet vs retail while still maintaining a lead overall. Expect the GM amount to grow as margin per vehicle does, especially with more consolidation of platforms coming. I will say that in the end I'm quite happy with Ford making a nice profit.. even besting Hyundai, Nissan, and VW

[El Kabong]

It's the trends that are the thing, though... GM's appear to be on the way up, Ford's on the way down.

[surreal1272]

This happened and I knu it would. I'm sure fanbois of Ford are now trying to figure out how to respond to the over $1B difference in selling more to fleet vs retail while still maintaining a lead overall. Expect the GM amount to grow as margin per vehicle does, especially with more consolidation of platforms coming. I will say that in the end I'm quite happy with Ford making a nice profit.. even besting Hyundai, Nissan, and VW

Well these were the same group of folks who derided GM for doing the exact same thing just a few years ago. The silence, now that the tables have turned, will be deafening.

[Cmicasa the Great]

It's the trends that are the thing, though... GM's appear to be on the way up, Ford's on the way down.

 

No doubt.. but in Europe.. Ford did beat GM by about $300Mil. Both need to figure out away to stay ahead of the Brexit Bull$h!

[ccap41]

 

It's the trends that are the thing, though... GM's appear to be on the way up, Ford's on the way down.

 

No doubt.. but in Europe.. Ford did beat GM by about $300Mil. Both need to figure out away to stay ahead of the Brexit Bull$h!

 

Yeah I was reading some on the financial websites and it looks like they are both going to lose a lot of money with the Brexit crap. 

 

One estimated Ford will lose $1.2B over the next two years from it.

http://www.marketwatch.com/story/brexit-could-cost-ford-up-to-12-bln-over-next-2-years-2016-07-28

GM estimated to lose $400M in just the second half of this year from it. So it sounds similar numbers to Ford's $1.2B over two years. Stupid Brexit bull$h!. 

[El Kabong]

Tomorrow's troubles are tomorrow's troubles. Today's troubles are the ones that should be looked at, for two reasons:

-today's troubles are largely self-inflicted, whereas Brexit is beyond any CEO's control.

-I predict Brexit, like every other European treaty change, will shudder, groan, and generally slouch itself to a mushy middle that will keep everyone where they want to be-mildly grumpy, but ok.

[ccap41]

Whoa Whoa Whoa... If you're an investor(which you brought up stock price) then you are absolutely looking at tomorrow's problems because tomorrow is when you will receive your dividends, or not receive them. Never be short sighted if you're talking about investing. 

[El Kabong]

But this brings me around to my original point: if a company falls short of predictions based solely on its own shortcomings, that is a far worse issue than the randomness of life throwing a Brexit in the way.

Or, was it the fault of the sources that the results went so pear-shaped? In which case, they need to fire people.

Either way, it is GM and not Ford who is doing better right now. And right now is what you will find on your invertors report.

[ccap41]

[FordCosworth]

While the results are lower than last year’s record second quarter, it was one of the best second quarters in the companies history. It also was Ford's best-ever second quarter in Europe – nearly tripled pre-tax profit versus last year. 

[Cmicasa the Great]

While the results are lower than last year’s record second quarter, it was one of the best second quarters in the companies history. It also was Ford's best-ever second quarter in Europe – nearly tripled pre-tax profit versus last year. 

 

 

[FordCosworth]

Year to date the General's stock has tumbled 8.8% to Ford's 10% so neither are kicking any ass right now. But both pay a healthy dividend so as long as they're both profitable I don't think the shareholders will be too upset about one quarter. 

 

 

 And looking at the price of said shares, 8.8% is larger loss financially than 10%

 

While the results are lower than last year’s record second quarter, it was one of the best second quarters in the companies history. It also was Ford's best-ever second quarter in Europe – nearly tripled pre-tax profit versus last year. 

 

 

 

 

 

No excuse was made.

[surreal1272]

Reduce the dependence on fleet/rentals and profits will pick up. Again, these are the exact same things that some stockholders here criticized GM for just a few years ago. They may forget that fact but it doesn't change it from being a fact. Now that the shoe is on the other foot, they have convenient excuses that they sure as hell did not offer GM during those years.

[FordCosworth]

Combined with Ford's record first quarter, Ford achieved record first-half pre-tax profits and operating margins!

[ccap41]

 

Year to date the General's stock has tumbled 8.8% to Ford's 10% so neither are kicking any ass right now. But both pay a healthy dividend so as long as they're both profitable I don't think the shareholders will be too upset about one quarter. 

 

 

 And looking at the price of said shares, 8.8% is larger loss financially than 10%

 

 

..yes...but no.. % is a pretty big deal because if I invested $1000 I would be buying a different amount of shares therefore the % lost is crucial. Rarely do people go search for a stock and say "I want to buy X shares", it is almost ALWAYS "I want to spend $X". Or "I have $X to spend."

[El Kabong]

While the results are lower than last year’s record second quarter, it was one of the best second quarters in the companies history. It also was Ford's best-ever second quarter in Europe – nearly tripled pre-tax profit versus last year.

 

 

More inconvenient truths:

GM operations for North America at 12.1% for 2Q16:

https://www.gm.com/content/dam/gm/mo...Highlights.pdf

Meanwhile, Ford's NA operating margin dropped from 12.9% in 1Q16 to 11.3% in 2Q16:

https://media.ford.com/content/dam/f...financials.pdf

That averages out to 12.1% for the first half. Those fleet sales surely didn't help with that.

[El Kabong]

Consider the source, man. If there's no good news, just attempt to distractify.

But it won't work in this case. It's pretty bleak news in Dearborn today

[El Kabong]

Drew: please do what you need to do to keep this thread open.

But I do want it kept open. It's legit news, and it doesn't deserve to be locked up because certain individuals are having temper tantrums.

Thanks in advance.

Edited July 28, 2016 by El Kabong

[El Kabong]

They missed the target for results. Their competition didn't. They need new cars. Their stock is being hammered. They themselves predict reduced sales going forward.

Your news is only good if you keep the blinders on.

[surreal1272]

They missed the target for results. Their competition didn't. They need new cars. Their stock is being hammered. They themselves predict reduced sales going forward.

Your news is only good if you keep the blinders on.

Exactly.

[William Maley]

Guys, you're really testing my patience today with the comments being thrown in this thread. I have cleaned it up and will be watching to see if anything warrants a lock. Don't push it.

[El Kabong]

Your efforts are appreciated, and definitely noticed.

[daves87rs]

Sales go back and forth guys......some times GM, some times Ford.

 

 

I curse neither, as I want both to be strong....currently some of Ford's products are aging-which should be fixed soon........

[Cmicasa the Great]

U kno what.. I'll be the first to say it.. Despite the Mustang's sales success due to fleet.. and evidenced by the current profits.. the only thing great about that car vs the Camaro is the tail lights. YES.. I think that Ford knocked the ball outta the park on the taillights vs the boys at Chevy on the Camaro's. Outside of that.. what does Ford really have that is special? The Raptor? The Focus RS which is possibly just a ghost. 

[G. David Felt]

End result, we want American auto companies to be profitable and survive. Last thing we need is for this segment to have all auto companies go to china.

 

This is one thing I do love about Tesla.

[ccap41]

U kno what.. I'll be the first to say it.. Despite the Mustang's sales success due to fleet.. and evidenced by the current profits.. the only thing great about that car vs the Camaro is the tail lights. YES.. I think that Ford knocked the ball outta the park on the taillights vs the boys at Chevy on the Camaro's. Outside of that.. what does Ford really have that is special? The Raptor? The Focus RS which is possibly just a ghost. 

"special" is a relative term everybody sees different. 

 

I see the GT, RS, GT350R as "special". They are limited and likely won't be around long for this body style. They do what they were designed to do very very well. I guess I shouldn't say the GT does as there's nothing out there on it but it's won races already so it can't be terrible. I could group in the Fiesta ST as well as there has been nothing but praise left and right about it's driving characteristics and how much fun of a car it is. I only kind of group it in because I also feel like there will be a 2nd, 3rd, 4th,...etc gen of the car. 

 

The Raptor is gnarly and badass but it seems like it is on pace to keep a "consecutive" run through different generations whereas those other seem like there will be longer breaks between generations. So I don't really see the Raptor as "special" but awesome and great at what its intended objectives are? Very much so. 

 

To me, the "special" GM products as the CTS-V, Z06, and ATS-V, (Last gen Z/28 as well but it's not produced now but I feel it deserves credit still). Yes, I know the Camaro is great at what it does and the ZL1 will be whooping some ass(probably slaying 100k cars like the Z06) but there's something about using the same engine in everything that takes some of the character away from it no matter how great of an engine that 6.2L supercharged is. 

 

Just my take on "special-ness" of a car. 

End result, we want American auto companies to be profitable and survive. Last thing we need is for this segment to have all auto companies go to china.

 

This is one thing I do love about Tesla.

Preach!!  

[El Kabong]

Tesla is American in much the same way Donald Trump is American: much talk, some sizzle, a game plan as organized as a herd of cats, all of it underpinned by a wave of unfocused anger at the establishment. I have no great love for what Ford is doing, but I at least can fathom what, exactly, that is.

[Suaviloquent]

Well, these are not outstanding results, but they delivered a profit anyhow.

 

I do see a big swing up for GM in the last few quarters.

 

But still, over the last 5-6 years on a whole level, it's GM that's underperformed, and massively at that. Ford cited why it went down - newer competition, and discounts on older product to remain competitive. Those are believable reasons.

 

I don't really expect older product relative to the competition to stand out anyways - nowhere has that kind of thinking really been broken at a consistent level. Yeah, you could cite Zeta Camaro SS 1LE versus S550 Mustang GT PP, but that's one comparison with a heavy weight on one criteria, performance driving at the very limit. Everywhere else, the Mustang wipes the floor off the Zeta Camaro in those exact specifications being compared. 

 

And think of it this way, I think Ford went to fleet because that helped them achieve cost targets for their passenger cars. I don't agree with being fleet heavy, but it is nothing new of domestic makes in their home markets. I guess Mercedes doesn't hide from fleet in Germany, now do they? Where do Toyota, Honda and Nissan get their corporate welfare from?

 

Now we know that those same passenger cars (Focus, and Fiesta, perhaps subcompact crossovers as well) are going to Mexico anyways, but it might have helped here. 

 

GM's fleet dump probably had something to do with that.

 

I am pleased with GM's build-up of performance. But they're winded themselves. Their run of all-new is ending, the next gen portfolio will all be do-overs of the current platforms, which are great, but like in some cases such as the Eplison or Chi, they're not staggering disruptors of the market, I mean the Malibu is a great car, but this is North America, ITs YOUR GIMME! The fact that any make that isn't domestic has an entrenched position where it pertains to passenger cars says it all.

 

Cadillac is surely to contribute to the new uptick in results, but I expected that and more.

 

Ultimately Ford is not guns blazing right now. They were when the Focus, Escape, Fusion and Explorer were all redone within the space of 2 model years. At that time they were taking a huge lead from the domestic pack.

 

But now reality is a blend of different things. For some stupid reason, Ford has no subcompact crossover. The same things that make the Fiesta a hoot to drive, its small size, tidy dimensions, well sorted chassis - make it a poor fit for the practicality minded buyers of a segment slowing down at this time. The Focus has stayed the course, but I think it really is showing it's age now. The Fusion has some new life breathed into it with the Platinum and Sport, but it looks just average in the mid trims, but styling is still a strong suit.

 

The crossovers are doing what they do - they keep selling! And trucks have come around, Platinum being one hell of a lucrative trim. 

 

I would cite performance cars as being important as they set a brand identity, but it goes both ways. GM lacks anything performance below the Camaro in Buick or other four door Chevy models. Cadillac has V, and it's right there in the instances where you have V models. Lincoln is laughable, but hey, the MKX, or the money machine can equal the competing Cadillac, and they're making 2 more new money machines pretty soon. Lincoln doesn't really need a performance line, because it would be an utter poor fit.

 

And then there is the sold-out exotic, which is currently the only production 2017 american exotic, with the defunct Viper, and while the Corvette reaches high, I'm not sure it's the kind of bespoke supercar the GT is, just like I don't consider the Porshce 911 to be a bepspoke supercar, though frankly both the Corvette and 911 have variants better than a McLaren F1 on a track. By that same notion, the Mustang has a variant that on a track a driver with equal skill will like more, and likely be faster than the 911 GT 3, which of course was beaten on a track by a Car that became MT's best driver's car, the, Zeta Z/28. In that aspect, the GT350R variant is it's own value.

 

Alas, pretty long talk, a lot of it opinion, none of it to change people's opinion, so HAVE AT IT.