Ford Drops After First-Quarter Profit Forecast Trails Estimates

[silvrsvt]

https://www.bloomberg.com/news/articles/2017-03-23/ford-sees-profit-falling-from-last-year-s-record-first-quarter

 

 

Ford Motor Co. said its profit may fall by half in the first quarter, a bigger drop than analysts predicted, as the automaker scales back production amid a declining U.S. market and deals with rising costs.

First-quarter adjusted earnings per share may be 30 to 35 cents, Chief Financial Officer Bob Shanks said during an investor call Thursday. The projection trailed the 47-cent average estimate of analysts surveyed by Bloomberg and compares with 68 cents a year earlier.

 

Which also explains the stock price dropping also.

[Anthony]

 

 

 

That red-text drop was exactly what I was referring to the other day. That was quite a sudden drop. GM had one as well (but not as drastic). Oddly enough, FCAU didn't seem to be fazed at all (if it was caused by the used car pricing report).

Edited March 23, 2017 by Anthony

[silvrsvt]

More info on why used car prices are hurting auto manufactures

 

https://www.fool.com/investing/2017/03/22/why-falling-used-car-prices-clobbered-auto-stocks.aspx

 

Sounds like the higher pricing of cars is what is really driving this..should be interesting how auto manufactures tackle this going forward.

Edited March 24, 2017 by silvrsvt

[jpd80]

and I wonder if this is just the beginning...

[SoonerLS]

Meh. If there were ever a company where the stock price was less relevant than it is for Ford, I don't know what it would be. As long as the company is profitable, I doubt that the Ford family gives two flips what the stock price is--it only matters when you go to sell the stock, and I doubt that any of them are even considering that.

It makes a good headline, but, as the Bard put it, it is a tale told by an idiot, full of sound and fury, signifying nothing.

[Anthony]

Meh. If there were ever a company where the stock price was less relevant than it is for Ford, I don't know what it would be. As long as the company is profitable, I doubt that the Ford family gives two flips what the stock price is--it only matters when you go to sell the stock, and I doubt that any of them are even considering that.

 

It makes a good headline, but, as the Bard put it, it is a tale told by an idiot, full of sound and fury, signifying nothing.

 

It may not matter to the Ford family, but it is an indicator of investor sentiment, which has more far-reaching implications across the industry.

[bdegrand]

I recall Jack Nasser taking all those expensive "ventures into new investments" which helped drop Ford into billions of deficit dollars . I see Fields taking a critical path with crazy dollars into questionable gambles like 'Driverless cars'....especially since nobody will ever be able to afford them. If we did not have F Series keeping us afloat...we would be in more trouble. What about battery and natural gas technology? People want better mileage .....not yuppy driverless cars. Those are for BMW drivers!

[akirby]

A - where do you see Ford investing "crazy dollars" in driverless cars? Frankly we don't know what they're investing. And most of those technologies are useful for drivers as well so it's not an all or nothing investment.

 

B - they're investing heavily in electrification and hybrids already - much more so than any other volume mfr it would appear based on the number of models they're forecasting. Natural gas is really only an option for fleets due to the limited refueling locations.

 

C - It's not either/or - Ford is investing in both. And people do want driverless technology - even if it's only used in certain situations or as driver aids. Ford would be stupid not to be looking into it, especially from a PR perspective.

[bdegrand]

A - where do you see Ford investing "crazy dollars" in driverless cars? Frankly we don't know what they're investing. And most of those technologies are useful for drivers as well so it's not an all or nothing investment.

 

B - they're investing heavily in electrification and hybrids already - much more so than any other volume mfr it would appear based on the number of models they're forecasting. Natural gas is really only an option for fleets due to the limited refueling locations.

 

C - It's not either/or - Ford is investing in both. And people do want driverless technology - even if it's only used in certain situations or as driver aids. Ford would be stupid not to be looking into it, especially from a PR perspective.

Here are a few examples of what is happening:

FEBRUARY 10, 2017 by: Leslie Hook in San Francisco

Ford is set to invest $1bn over the next five years in a new driverless car unit Argo, led by two engineers who were previously at Google and Uber, marking a shift for the carmaker that had tried to develop autonomous vehicles in-house.

 

Ford (Fields) also invests in Chariot,a San Francisco Electric bike company to do ride sharing. Reminds me of Jack Nasser who bought THINK , a Norwegian company back in 2000 to make electric bikes and golf carts. FAILED!

 

I look at Toyota with the new Lithium ion long range battery....the Honda Hydrogen cars technology....and then Ford throwing money out on bikes and ride sharing and cars that drive themselves....which most people will never afford. I understand the need for electronic advancements but am concerned with throwing money at pathways that we already travelled. Look at the MYFORD Microsoft failure. We still live with that mistake every time Consumers Report or car magazines talk about Ford.

[akirby]

Again, that's a technology investment, not necessarily a product investment. Whatever technology Argo comes up with, Ford can use. They can also sell it to other companies. This is really just outsourced R&D which frees up internal resources to continue working on hybrid and electric vehicles. Ford anticipates a BEV with a 300 mile range - that's certainly competitive with anything Toyota or GM or Tesla is working on.

 

So they're not investing in these other things INSTEAD of investing in short term competitive products. They're doing both. The flip side of not investing in driverless technology is that they get left behind if those technologies do become viable and desirable.

[rmc523]

Here are a few examples of what is happening:

FEBRUARY 10, 2017 by: Leslie Hook in San Francisco

Ford is set to invest $1bn over the next five years in a new driverless car unit Argo, led by two engineers who were previously at Google and Uber, marking a shift for the carmaker that had tried to develop autonomous vehicles in-house.

 

Ford (Fields) also invests in Chariot,a San Francisco Electric bike company to do ride sharing. Reminds me of Jack Nasser who bought THINK , a Norwegian company back in 2000 to make electric bikes and golf carts. FAILED!

 

I look at Toyota with the new Lithium ion long range battery....the Honda Hydrogen cars technology....and then Ford throwing money out on bikes and ride sharing and cars that drive themselves....which most people will never afford. I understand the need for electronic advancements but am concerned with throwing money at pathways that we already travelled. Look at the MYFORD Microsoft failure. We still live with that mistake every time Consumers Report or car magazines talk about Ford.

 

You must have missed this announcement:

 

https://media.ford.com/content/fordmedia/fna/us/en/news/2015/12/10/ford-investing-4-5-billion-in-electrified-vehicle-solutions.html

 

and this one just two months ago:

 

https://media.ford.com/content/fordmedia/fna/us/en/news/2017/01/03/ford-adding-electrified-f-150-mustang-transit-by-2020.html

[630land]

East and West Coast investors expect Detroit to make "miracle cars" that run on thin air. Or, invent "teleportation devices", thinking "Star Trek" Sci Fi stuff is "just around the corner".

 

Anyway

 

Daniel Howes had a good article about this, one quote:

 

"It's a new automotive world, transformed by technology and pressure from Silicon Valley. If Ford doesn't grab its share, someone else will."

 

 

I say can't expect them to make toys for fan-bois wanting 80s/90s sticker prices, Euro spec wagons, and return of Panther.

Edited March 24, 2017 by 630land

[SoonerLS]

Again, that's a technology investment, not necessarily a product investment.

It's a lot like the old Bell Labs--not everything they did was a direct benefit to the company, but a lot of it did, and it seriously advanced the "state of the art" in technology.

 

Yes, there's a lot of pie in the sky surrounding driverless cars, but the technologies that are being developed to achieve that end have applications that could make driving safer for all of us. As I recently heard someone say, she knew an engineer who always shot for the moon on projects; although she never did reach the moon, she made it to some really high mountain tops along the way.

 

You also have to consider that a $1B investment over five years is basically a rounding error for a company that's seeing about $140 billion per year in revenues. It's a heck of a lot of money to me, but it's chicken feed for a company the size of Ford.

[akirby]

It's a lot like the old Bell Labs--not everything they did was a direct benefit to the company, but a lot of it did, and it seriously advanced the "state of the art" in technology.

 

You mean silly things like the transistor or Unix? That was an interesting funding model. The government funded that type of research indirectly through regulated phone prices. I don't see that model coming back, but I do see Ford gaining technology through this research that would translate to all vehicles not just driverless vehicles.

[fuzzymoomoo]

 

You mean silly things like the transistor or Unix? That was an interesting funding model. The government funded that type of research indirectly through regulated phone prices. I don't see that model coming back, but I do see Ford gaining technology through this research that would translate to all vehicles not just driverless vehicles.

isn't that basically what the purpose is behind programs like the GT, Shelby Mustangs and Focus RS/ST?

[SoonerLS]

but I do see Ford gaining technology through this research that would translate to all vehicles not just driverless vehicles.

I think it was on the Know How podcast, but earlier this year I saw some coverage of Ford's autonomous Fusion research vehicle at CES. One of the parts of the display was monitors showing how the car's systems were tracking, in real time, all of the people crowded around the car. (Not the creepy "John Smith, 1234 Main St." kind of tracking, but you could "see" individual figures in the crowd and how they were moving.) I really could've used that technology about a year ago...

[SoonerLS]

isn't that basically what the purpose is behind programs like the GT, Shelby Mustangs and Focus RS/ST?

Not exactly--those programs are implementing (new) technologies; Bell Labs was inventing new technologies. The equivalent would have Ford inventing things like the microwave oven and the pacemaker, things which have basically no application for the company's core business, along side things like a Mr. Fusion engine.

Edited March 24, 2017 by SoonerLS

[akirby]

Exactly. AT&T was doing pure research prior to divestiture in 1982 - a lot of which was unrelated to telephone service. That changed when they lost monopoly status and had to compete with private companies.

[RichardJensen]

Computer animation, electronic music & electronic audio modification, voice recognition, voice synthesis, digital art (including those eye-bending 'magic eye' graphics) voice analysis, Unix, C, nested directories for computer file storage and even UTF-8 were all invented or done for the first time by a small team of people who all worked along a common corridor on the 6th floor of Bell's Murray Hill lab complex.

 

Max Mathews, Ken Thompson and Dennis Ritchie are among the best known individuals, but there were many more.

 

Doug McIlroy, Joe Osanna, Lorinda Cherry, Brian Kernighan, Sam Morgan, Rudd Canaday, Bela Julsz, Manfred Schroder, Laurie Spiegel, Ken Knowlton, Ed Zajac, Al Aho and more--all of them did some pretty amazing things in a very small space.

 

Ken Knowlton, in conceptualizing BEFLIX, the first computer animation software, basically developed the concept of a pixel.

 

All of these things would have been developed (or something similar to them) eventually. The time was right for them.

 

But it is frankly astonishing that so many of these things were developed by people who knew each other, worked with each other, and all worked under the same guy: Max Mathews.

[RichardJensen]

 

First computer animation: Figuring out how to tidally lock a satellite as efficiently as possible.