FORD - gz
By: GZ on Mercoledì 16 Ottobre 2002 21:04
Come noto Ford benchè venda e tenga quota di mercato a differenza di Fiat non guadagna molto e ha parecchio debito per cui il mercato la tratta come se stesse andando in bancarotta (vedi grafico che è molto peggio di FIAT !).
^Ford#^ capitalizza 15 miliardi di dollari e se leggo bene e non ci sono errori su Bridge fattura 160 miliardi !.
Peugeot capitalizza 11 miliardi e Renault 11,5 pure essendo grandi un quarto di Ford, questo tanto per dare un idea.
Fiat capitalizza 15 miliardi di dollari, quanto Ford.
Questo post mi serve come riferimento per una raccomandazione su Ford che metto ora
Copio e incollo qui quello che ha detto la Ford ieri sera presentando i suoi risultati. La cosa interessante sono le domande e risposte.
---------------Swenson : RealMoneyProAdvisor ---------------------------------
didn't get a lot of great info from this call. I'm concerned that guidance has apparently been lowered for the year on the heels of a strong Q3 (Ford now guiding to 40 cents for the year vs. 43 cents street consensus), EPS was 9 cents better than expected. The only explanation I heard on this was development costs for the new F Series. The company also confirmed their thoughts that volumes would be down next year. I remain concerned about the depth of this, the health of the consumer and Ford's liquidity.
I don't expect dividend cut at Ford (it's now at 40 cents per share -- 4.5% yield), as the ratio of total annual dividends and cash available stays sane. The cost-cutting program appears to be proceeding on track -- $2B in savings by the end of this year, another $7B by mid-decade.
I am concerned if we get a steeper-than-expected downturn in the auto industry next year, Ford may have to tap the bond market for money, which could be problematic. Ford currently trades at about .25 times revenue (on enterprise value).
My internal goal is to see it revert back to a more normal .50, which gives me a price target of around $16. I will continue to hold the stock but not my breath, as I'm very leery of 2003 for the auto industry. Therefore, I won't add to positions but will continue to hold.
I remain unexcited but feel I'm late in selling so will hold long term.
Q: Attacking non-product costs, what will you be targeting?
A: Can't give specifics yet, just look at it as more of an acceleration of cost cutting program.
Q: Do non-product costs include manufacturing costs?
A: Non-product is a huge part of cost base. One thing they won't do is cut CapEx.
Q: Outlook for this year?
A: 40 cents in EPS for the year (that's down -- still somewhat of a mystery why).
Q: What are the biggest uncertainties going forward?
A: Lots of concern macro economically, war, etc.; currency devaluations; WTO being implemented in other areas of the world. Just need to make sure they can control well what they can control.
North American pre-tax earnings and net income?
A: The difference was the coupon on the convertible preferred.
Q: Deterioration on profits in Q4?
A: Yes, really due to development costs of new F Series (answer was vague intentionally).
Q: How many jobs have been cut with the goal of 12,000 cuts?
A: Net 500 cut so far -- have a long way to go.
Q: Will price reductions continue in U.S.?
A: Plan is to keep prices level, market share will stay at same level -- don't expect increases going forward (somewhat strange -- I don't like this).
A: Important to keep, there are some funds that can't hold shares if no dividend -- expect to keep it at same level.
Q: Europe was weak vs. last year, was this due to Jaguar?
A: Yes, due to Jaguar/Volvo -- Jaguar was product and marketing costs also inventories were too high at the beginning of the year. Had to do destocking of Jaguar and also a large number of new launches, which cause lots of spending.
A: Still terrific brands, are focused on new campaigns for both.
Q: What % of sales financed are being financed at below cost of funds?
A: 46% of sales are financed and 25% of these got the zero rate. The differential is treated as a marketing expense. FoMoCo pays Ford Credit the lost interest as a marketing cost.
Q: How does the recent glut of used cars impact sales?
A: The scrappage rate of used cars has gone way up, as has the number of licenses, so this absorbs a lot of this, so have not seen a tremendous drop in residual value – no one really knows the answer to this question. Q: Bond market?
A: Clearly general skittishness out there -- only was to respond is to work quarter to quarter to hit targets. Have shown the world that Ford can perform over the last three quarters.
Overhead -- comp and benefit changes showing improvement. Europe -- core car and truck product lines have all been renewed. New Fiesta recently unveiled in Paris. Europe cost reductions on target. Sales and service satisfaction at it's highest level in Europe. Market share up to 8.8% (Ford only) - (This number has stayed in the 8%s for about one year, so not huge gains here). When add in the other brands, market share at about 11% (Ford in Europe has always seemed like a confused entity to me, no real strong direction there, just there to be there in a way).
Revitalization plan -- 12% improvement in quality on 2002 models. Warranty data shows claims down 8%. Market share for September at 25.2% -- highest this year.
F Series the highest selling vehicle in the U.S. Mustang Mach 1 coming soon, new Windstar next fall as well as all new F-150. Plan is to hit a profit around 2005 of $7B (wow).
Europe loss was $97 million higher, due to higher marketing costs for Jaguar, Volvo, etc. South America loss $87 million higher, due to mainly currency devaluations. Cash now at $27.5 billion, up $800 million helped by positive operating cash flow of $600 million. Took a $500 million write down from Qwik-Fit this quarter (U.K. repair business). Strong cash position will enable them to meet pension obligations comfortably.
Main message -- turnaround plan working -- will meet or exceed all targets set internally. Claim to be gaining market share worldwide. Volume in the U.S. remains strong. Retail focused on selling the Explorer and F Series. Industry volumes next year expected to be down slightly. Plan to increase sense of urgency at Ford and will accelerate cost cutting efforts (the goals are solid, let's hope they can execute).
Ford (F:NYSE) reported Q3 earnings that were much better than expected. Before one-time items, the company reported EPS of 12 cents per share, much better than the 3 cents expected by the Street. The company is now nine months into a $9 billion corporate revitalization plan, which seems to be gaining some traction after a sputtery start. We own some F, not a ton and concerns are numerous -- the debt situation appears to be getting worse and we expect auto sales to slow from the huge pace experienced earlier this year.
Also, pension fund assets, which are 70% invested in stocks, continue to erode, now down 15% year to date. We are hopeful that the turnaround plan will take hold in a meaningful way sometime early next year. Ford currently loses about $50 per vehicle sold, while General Motors (GM:NYSE) makes about $350.
On this call I'm listening for signs of improvement and remain a peeved holder of F.
Swenson is a partner and portfolio manager with JW Swenson Investment Counsel in Weston, Mass., which manages more than $100 million for individual investors. Before joining JWSIC, Swenson was a vice president with Fidelity Ventures and focused on venture investments in telecommunications companies. He was also chief financial officer for TeleGea Inc., a telecommunications-software company.
Edited by - gz on 10/16/2002 20:44:14