No love for Ford on Wall Street Shares fall despite company's gains

[Edstock]

The experts just do not see the difference between Ford in 2006 and Ford in 2016.

[sullynd]

There is always New York and Chicago, although Ford doesn't seem to be tied to auto shows to make those kinds of announcements.

The domestics don't seem to care much about Chicago despite it being the largest show. Fiat seems to do the most of the three.

[Anthony]

I bought in at $14.82, but I'll stick it out. Dividends are pretty good and I know it'll bounce back eventually.

[Biker16]

The experts just do not see the difference between Ford in 2006 and Ford in 2016.

 

2006 annual report

http://corporate.ford.com/content/dam/corporate/en/investors/reports-and-filings/Annual%20Reports/2006-annual-report.pdf

 

How about 1996?

 

Report on Ford from 1996

 

 

 

Ford Reports Higher Earnings for 1996 By ROBYN MEREDITH Published: January 30, 1997

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DEARBORN, Mich. Jan. 29— The Ford Motor Company reported higher earnings today for the fourth quarter and all of 1996, despite continued losses in the European and Latin American divisions.

Ford has long been trying to make its cars less expensively, and Ford executives said that this year, for the first time, Ford would succeed in keeping its cost structure below that of the preceding year. ''Our costs in 1997 will be below what they were in 1996,'' John M. Devine, Ford's chief financial officer, said.

But the auto maker's continuing losses overseas, at the same time that the General Motors Corporation's foreign operations are thriving, were a further sign of problems that top executives are now struggling to correct.

''Our U.S. operations, which contribute about 65 percent of our automotive revenues, have been on an improving trend for the last three quarters,'' Alex Trotman, Ford's chairman and chief executive, said. But he acknowledged that the company faced challenges in Europe and South America.

Ford said that in the fourth quarter, its earnings rose to $1.20 billion, or 99 cents a share, from $660 million, or 48 cents a share, a year earlier. For the year, Ford's earnings rose to $4.45 billion, or $3.64 a share, from $4.14 billion, or $3.33 a share, in 1995. For both periods, the lion's share of Ford's profits came from the company's financial services units, despite rising credit losses at Ford Credit, and not from the car-building operations.

Excluding one-time charges and gains, Ford earned $1.10 a share in the fourth quarter, narrowly beating analysts' expectations of a profit of $1.02 a share. ''It makes it a clean sweep for all three auto makers in that they all came in above expectations,'' said Charles L. Hill, the research director at the First Call Corporation, a Boston-based group that tracks analysts' estimates.

In the most recent quarter, revenue rose to $38.8 billion from $34.5 billion. Sales for the year rose to $147 billion from $137.1 billion.

G.M. reported on Tuesday that its profits had dropped sharply because of two strikes in October, but the drop was not quite as deep as analysts had feared. The Chrysler Corporation reported strong profits on Jan. 21.

For the fourth quarter, Ford posted a $204 million gain from partly reversing a second-quarter provision for losses on loans to Budget Rent-a- Car, which Ford has agreed to sell to Team Rental Group Inc. Ford's results also included a one-time charge of $336 million in connection with staff reductions that are part of the company's overall move to reduce costs. The auto maker is demanding lower prices from its suppliers and trying to redesign its models to make them cheaper to assemble, Mr. Devine said.

Analysts said the results showed that Ford had room to improve its operations. ''Ford is not out of the woods yet,'' said Ronald A. Glantz, an auto analyst at Dean Witter.

Mr. Devine also warned that the dollar's rise against the yen to a four-year high was hurting American auto makers' ability to compete against Japanese auto makers. ''We're working our brains out to get our costs down, and in the stroke of a couple months of exchange rate movements, that's wiped out,'' he said.

Ford stock slipped 12.5 cents, to $32.375, today. Investors may have been disappointed that Ford did not signal whether it would soon consider buying back some of its stock, said Joseph S. Phillippi, an auto analyst at Lehman Brothers. Chrysler and G.M. are flush with cash and have said they will buy back billions of dollars' worth of their stock.

At the end of the year, Ford's automotive operations had $7.2 billion in cash, up from $5.1 billion at the end of 1995. But Mr. Devine said today that the company had not yet met its reserve target, though he declined to specify the amount.

Still, the company and its stockholders seem most concerned about Ford's European operations, which lost $88 million in the fourth quarter. While that is an improvement from the $472 million loss in the third quarter, it is a bigger shortfall than the $40 million loss in the fourth quarter of 1995.

Jacques A. Nasser, president of Ford's worldwide automotive operations, said in an interview this month that stanching the losses in Ford's European operations ''won't be easy, and it will take time.''

''I'm spending a couple of weeks in Europe a month,'' he said.

Earlier this month, Ford announced that it would cut 1,300 of the 4,500 jobs at a factory near Liverpool, England, that builds the Escort, because the factory had too much capacity. Other cost-cutting measures were being considered. ''I wouldn't rule out closing a plant,'' Mr. Trotman said in early January.

Mr. Devine said today, ''We do expect losses to continue for some time'' in Europe. ''No one should underestimate the difficulty of the European market'' for Ford and other auto makers, he said.

 

Adjusted for inflation 1$ in 1996 = $1.51 in 2015

[RichardJensen]

https://corporate.ford.com/investors/stock-info-and-tools/splits-and-spinoffs.html

 

$32.375 * .6641 * ~.6053 (assuming 50/50 election on the VEP) * .9607 = $12.50.

 

Yes, that still represents a decline over 2016's valuation, but that ignores the dividends which come to $19.09 (or $37.52 depending on the VEP election), which shows that an investment in Ford in 1996 has outpaced inflation over a 20 year period, despite the company almost going bankrupt.

 

Also, perhaps you've noticed that Ford's cash position is significantly stronger than it was 20 years ago, and that their margins are also significantly better.

Edited January 26, 2016 by RichardJensen

[RichardJensen]

Also, it's apples to oranges to compare the S&P which is an index with individual stock prices, but---bearing in mind that the S&P index is not inflation adjusted, dividends over time plus change in stock price shows that an investment in Ford at $32.375 in which one opted to take the full share allocation (and not the $20 cash dividend) has yielded a ROI of 253% not including the benefits of inflation on dividends paid; by contrast the S&P index has increased 235% during that period.

Edited January 26, 2016 by RichardJensen

[Biker16]

https://corporate.ford.com/investors/stock-info-and-tools/splits-and-spinoffs.html

 

$32.375 * .6641 * ~.6053 (assuming 50/50 election on the VEP) * .9607 = $12.50.

 

Yes, that still represents a decline over 2016's valuation, but that ignores the dividends which come to $13.12 (or $33.12 depending on the VEP election), which shows that an investment in Ford in 1996 has outpaced inflation over a 20 year period, despite the company almost going bankrupt.

 

Also, perhaps you've noticed that Ford's cash position is significantly stronger than it was 20 years ago, and that their margins are also significantly better.

 

The issue I am most concerned about is the condition of Ford's Non-North American units have changed. While Ford is even more dependent on North America for Profit, which is concerning since in 1996 North America Was the World's largest auto market and today it is 3rd.

[RichardJensen]

                                                                   Net Income/(Loss)                                                                   ---------------------------------                                                            1996         1995          1994                                                            ------       ------        ------ <S>                                                       <C>           <C>           <C>                 U.S. Automotive                                   $2,007       $1,843        $3,002         Automotive Outside U.S.         - Europe                                            (291)         116           128         - South America                                     (642)         (94)          496         - Other                                              581          191           287                                                                   ------       ------        ------                  Total Automotive Outside U.S.                      (352)         213           911                                                           ------       ------        ------             Total Automotive                               $1,655       $2,056        $3,913                                                           ======       ======        ======

http://www.sec.gov/Archives/edgar/data/37996/0000037996-97-000008.txt

 

Ford's NA profits were 121% of net global in the full year 1996 and 117% of net global for the first three quarters of 2015.

[RichardJensen]

I mean, are we going to be panicking because Ford is too dependent on North America?

 

Or are we going to panic because Ford hasn't announced all their plans for electric vehicles--which are only popular in North America?

 

Are we going to panic about Ford's share price over the past twenty years, even though including dividends, it's been a pretty decent investment?

 

(side note: I just realized that I should've multiplied all those dividend totals by the inverse of the split values, thus making F an even better investment.)

 

What's the panic du jour?

[RichardJensen]

Please note that, taking into account the splits and dividends--and the effect of the dividends on the splits--the ROI on a share of Ford purchased at $32.375 in 1997 is 253%. If the shareholder opted to receive more shares in Ford in the VEP.

 

If the shareholder opted to take the $20 cash in the VEP distribution, the ROI on a share of Ford purchased at $32.375 in 1997 is 400%.

[banker55]

Please note that, taking into account the splits and dividends--and the effect of the dividends on the splits--the ROI on a share of Ford purchased at $32.375 in 1997 is 253%. If the shareholder opted to receive more shares in Ford in the VEP.

 

If the shareholder opted to take the $20 cash in the VEP distribution, the ROI on a share of Ford purchased at $32.375 in 1997 is 400%.

 

I may have missed it. Was the Hertz spin-off in 2005 included in your calculations. I am sure I received some Hertz shares or cash or more Ford shares.

[RichardJensen]

as far as I can see based on this article, there wasn't a distribution to Ford shareholders, and since Hertz was sold to private equity people, there shouldn't have been a share distribution:

http://usatoday30.usatoday.com/money/autos/2005-09-12-hertz_x.htm

[Biker16]

                                                                   Net Income/(Loss)                                                                   ---------------------------------                                                            1996         1995          1994                                                            ------       ------        ------ <S>                                                       <C>           <C>           <C>                 U.S. Automotive                                   $2,007       $1,843        $3,002         Automotive Outside U.S.         - Europe                                            (291)         116           128         - South America                                     (642)         (94)          496         - Other                                              581          191           287                                                                   ------       ------        ------                  Total Automotive Outside U.S.                      (352)         213           911                                                           ------       ------        ------             Total Automotive                               $1,655       $2,056        $3,913                                                           ======       ======        ======

http://www.sec.gov/Archives/edgar/data/37996/0000037996-97-000008.txt

 

Ford's NA profits were 121% of net global in the full year 1996 and 117% of net global for the first three quarters of 2015.

 

 

That isn't much of a change. except the Market as a Whole has shifted and Ford has not.

[RichardJensen]

 

That isn't much of a change. except the Market as a Whole has shifted and Ford has not.

http://www.corbisimages.com/images/Corbis-42-20897073.jpg?size=67&uid=b80b0611-f038-43a2-be0d-be76332fadfe

[Biker16]

http://www.corbisimages.com/images/Corbis-42-20897073.jpg?size=67&uid=b80b0611-f038-43a2-be0d-be76332fadfe

 

 

HAU THAI-TANG

GROUP VICE PRESIDENT

GLOBAL PURCHASING

J. P. MORGAN AUTO CONFERENCE

AUGUST 12, 2015

Follow along

Slide #2 page #3

More Balanced Regional & Segment Profits

Top 5 Sales / 10%+ Global Share

Ford hasn't been Able to do those 2 things yet, until they Do We should be concerned, not in a panic but concerned.

[jpd80]

 

 

 

HAU THAI-TANG

GROUP VICE PRESIDENT

GLOBAL PURCHASING

J. P. MORGAN AUTO CONFERENCE

AUGUST 12, 2015

Follow along

Slide #2 page #3

More Balanced Regional & Segment Profits

Top 5 Sales / 10%+ Global Share

Ford hasn't been Able to do those 2 things yet, until they Do We should be concerned, not in a panic but concerned.

 

And then on Slide 1 you have this:

 

 

THE PLAN

- Aggressive restructure to operate profitably at the current demand and changing model mix

- Accelerate the development of new products our customers want and value

- Finance our plan and improve our balance sheet

- Work together effectively as one team.

Edited January 27, 2016 by jpd80

[Biker16]

And then on Slide 1 you have this:

 

 

THE PLAN

- Aggressive restructure to operate profitably at the current demand and changing model mix

- Accelerate the development of new products our customers want and value

- Finance our plan and improve our balance sheet

- Work together effectively as one team.

 

 

what does this plan mean?

 

What entailed in "Aggressive restructure"

 

What is the priority of this plan? Operate profitably? or Accelerate the development of new products?

 

What are the nuts and bolts of this plan?

 

When will we see results? When The Focus was launched it was the First One Ford product it provided a metric of success or failure.

 

How does Ford's mobility initiative fit in with this plan?

 

If I am a potential investor these are substantive Questions that I don't believe have been answered.

[akirby]

 

What is the priority of this plan? Operate profitably? or Accelerate the development of new products?

 

It's obviously both. If you don't operate profitably you won't be around to launch any new products.

 

Seriously - call Mr. Fields and ask to see the 5 and 10 year product development roadmaps. Go ahead, we'll wait.

 

For that matter - which other automaker gives you this kind of detailed info on future products (outside of the idiots at FCA and Cadillac)?

[Biker16]

 

It's obviously both. If you don't operate profitably you won't be around to launch any new products.

 

Seriously - call Mr. Fields and ask to see the 5 and 10 year product development roadmaps. Go ahead, we'll wait.

 

For that matter - which other automaker gives you this kind of detailed info on future products (outside of the idiots at FCA and Cadillac)?

 

You are not listening, I want a Strraegy, a commitment to do something not a Fluffy list of goals without measurable metrics.

 

Not my Quote

 

 

Last week Ford shares fell to their lowest closing price in more than three years. They've dropped 19 percent since January 2015, when CEO Mark Fields launched his signature initiative, Ford Smart Mobility, a plan to take the 112-year-old manufacturer into the realm of transportation services. After Ford said it would reward shareholders with a $1 billion special dividend, shares fell 5 percent the next day.

One analyst, Adam Jonas of Morgan Stanley, went so far as to compare Ford's talk of "huge opportunity" in a world of shared and self-driving vehicles to bullishness from Kodak, Blockbuster and other companies that crashed when new technology left them behind. Automakers are facing potential competition from businesses they have never had to be concerned with until now.

"I can't spin that positively," Jonas said this month at the Automotive News World Congress. "The stock market's like 'Hey, we've seen this before. This industry is incredibly ripe for disruption. The disruption's probably not going to come from the 100-year-old mechanical legacy.'"

Fields, Ford's CEO since mid-2014, bristled at the notion his management team is naive about the risks posed by Uber and other new ways for consumers to get around. "We get it," Fields told Jonas at a Jan. 12 conference hosted by Deutsche Bank in Detroit. "We are taking this very, very seriously as a company, and we want to lead in it."

 

 

Something More along these lines.

 

[akirby]

OK

[RichardJensen]

 

I want a Strraegy

 

And because Ford hasn't told you what it is, you assume it doesn't exist.

 

This topic as well as all the other topics you are keeping alive with your horse-switching, goal-post-moving, and unrealistic and irrational posts are all closed.

 

Take a hint.

[Joe771476]

These analysts are just that..........ANALysts! Every day in the WSJ they explain a downward or upward swing in the stock market on this occurrence and that occurrence. I think they blamed the weather one time and the president's speech another. Most make no sense at all, but they have to give a reason to justify their jobs. And making a company sell off its assets and divisions to increase shareholder value is another joke! Ford sold off the farm tractor and heavy truck biz for "shareholder value" and the stock went down, not up! All those sell-offs did was emasculate and emaciate Ford.

Edited February 25, 2016 by Joe771476

[theoldwizard]

I want a Strraegy,

• Offshore "low" profitability vehicles.
• Expand the number of different models of current "high demand"/profitable vehicles (trucks and SUVs).

The real issue is how fast can they do this !

 

(And if you are a pessimist at heart, what will happen if demand for trucks and SUV suddenly dries up !)

[silvrsvt]

 

(And if you are a pessimist at heart, what will happen if demand for trucks and SUV suddenly dries up !)

 

 

This isn't 2004 when they had just the Focus as a decent car product (at least in the US)

 

They aren't stopping investment in cars like they did in the late 1990s.

[grbeck]

Plus, the SUVs (most of which are now "crossovers") aren't all gas guzzlers these days. Escape sales, for example, will hold up even with higher gasoline prices.