Stock Alert for Ford Motor Co. (F)
Ford Motor Co. (NYSE: F)
Ford Motor Company designs, develops, manufactures, and services cars and trucks worldwide. Ford and its subsidiaries also engage in other businesses, including financing vehicles. It operates in two sectors, Automotive and Financial Services. The Automotive sector sells vehicles under Ford, Mercury, Lincoln and Volvo brand names. This sector markets cars, trucks and parts through retail dealers in North America, and through distributors and dealers outside of North America. It also sells cars and trucks to dealers for sale to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. In addition, this sector provides retail customers with a range of after-the-sale vehicle services and products in areas, such as maintenance and light repair, heavy repair, collision, vehicle accessories and extended service warranty under the Genuine Ford, Lincoln-Mercury Parts and Service, Ford Custom Accessories, Ford Extended Service Plan and Motorcraft brand names. The Financial Services sector offers various automotive financing products to and through automotive dealers. It offers retail financing, which includes purchasing retail installment sale contracts and retail lease contracts from dealers, and financing to commercial customers to purchase or lease vehicle fleets; wholesale financing that comprises making loans to dealers to finance the purchase of vehicle inventory; and other financing, which consists of making loans to dealers for working capital, improvements to dealership facilities, and to purchase or finance dealership real estate. This sector also services the finance receivables and leases that it originates and purchases, makes loans to its affiliates, purchases receivables, and provides insurance services related to its financing programs.
Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan.
| Share Statistics (Jul-16-10) | FY
2007 |
FY
2008 |
%
Chg |
Q4 2008 | Q4 2009 | %
Chg |
||
| Symbol | F | Revenue, $Mn | 172.5B | 139.3B | 19.2% | 38.60B | 27.19B | 29.6% |
| Current price | $11.86 | Gross marg. | 10.8% | 6.4% | 40.7% | n/a | n/a | n/a |
| 52wk Range: | $14.57-5.84 | Oper. margin | -4.7% | -10.9% | 131.9% | n/a | n/a | n/a |
| Avg Vol (3m): | 108,670,000 | Net margin | -1.6% | -10.6% | 84.9% | n/a | n/a | n/a |
| Market Cap. | 40.40B | |||||||
| Shares Outst. | 3.3B | EPS, $ | -1.40 | -6.41 | 357.9% | -2.46 | 0.25 | 110.2% |
Source: Reuters.com, SEC Filings.
Financial Summary
Ford recently reported first quarter 2010 net income of $2.1 billion, or 50 cents per share, a $3.5 billion improvement from first quarter 2009, as strong selling new products, improvements in its global Automotive operations and higher profits at Ford Credit boosted results.
Excluding special items, Ford reported pre-tax operating profit of $2 billion, or 46 cents per share, an improvement of $4 billion from a year ago. It marked Ford’s highest quarterly pre-tax operating profit in six years.
Ford North America posted first quarter pre-tax operating profit of more than $1.2 billion, a $1.9 billion improvement from first quarter 2009, as a result of higher volume and mix and favorable net pricing. Ford operations in South America, Europe and Asia Pacific Africa as well as Ford Credit also posted pre-tax operating profits in the first quarter and improved results over the same period in 2009.
At the end of March, Ford entered into a definitive agreement to sell Volvo and related assets to Zhejiang Geely Holding Group for $1.8 billion, subject to customary purchase price adjustments. The sale is expected to close in the third quarter of 2010. As a result of the agreement to sell Volvo, all of Volvo’s 2010 results are being reported as special items and excluded from Ford’s operating results; 2009 data include Volvo.
Ford’s first quarter revenue was $28.1 billion, up $3.7 billion from the same period a year ago. If Volvo had been excluded from 2009, Automotive revenue would have increased by $7 billion, or more than 30%.
Ford finished the first quarter with $25.3 billion in Automotive gross cash, an increase of $400 million since year end. Automotive operating-related cash outflow was $100 million during the first quarter, as Automotive pre-tax operating profit was more than offset by changes in working capital and other timing differences, as well as a $300 million payment to Ford Credit reflecting up-front subvention payment. The Company ended the first quarter with total Automotive debt of $34.3 billion, an increase of $700 million compared to year-end 2009.
On April 6, Ford paid down $3 billion of the drawn amount of its 2013 revolving credit facility. This payment has reduced Automotive gross cash and debt by $3 billion, which will be reflected on Ford’s second quarter 2010 balance sheet. The action did not affect Automotive liquidity, as the repaid amounts remain available for borrowing.
Special items were a favorable pre-tax amount of $125 million in the first quarter of 2010, or 7 cents per share. Ford recorded a $188 million gain related to held-for-sale adjustments for Volvo, which was offset partially by $63 million of global personnel reductions and dealer-related charges. If Volvo had continued to be reported as an ongoing operation, Ford would have reported a first quarter pre-tax operating profit of $49 million for Volvo.
ADDITIONAL FIRST QUARTER 2010 HIGHLIGHTS
Increased U.S. market share by 2.7 percentage points to 16.6% and a 14.1 share of the retail market, fueled by strong sales of Fusion, F-150, Taurus and Focus
Achieved market leadership in Canada, boosting market share to 15.5% and increasing sales by 29%
Increased sales by 14% in the South American region and sold a record 88,000 vehicles in Brazil
Increased sales in Europe and achieved a 9.4% market share. In March, Ford was the best selling brand in Europe for the 19 markets it tracks
Ford Asia Pacific Africa increased sales by 39% as the Fiesta gained momentum in several markets
Ford, Lincoln and Mercury vehicles achieved the highest customer satisfaction and the fewest number of “things gone wrong” among all full-line manufacturers, according to the first quarter Global Quality Research System survey for the United States
Revealed new global Ford Focus, which goes on sale early next year in North America and Europe, and in 2012 for Asia
Revealed 2011 Ford Edge and Lincoln MKX, which reach showrooms this fall and will be the first vehicles to feature MyFord Touch and MyLincoln Touch
Unveiled the Lincoln MKZ Hybrid, expected to be America’s most fuel-efficient luxury sedan
Announced partnership with Microsoft to use Microsoft Hohm as a platform to help future owners of Ford’s electric vehicles manage energy use
Began production of Figo small car for India; received 10,000 orders in first month on the market
Began production of the next-generation F-Series Super Duty lineup with new fuel-efficient diesel and gasoline engines
Announced Ford’s electric vehicles plan is extending to Europe with plans to launch five full-electric or hybrid vehicles for European customers by 2013
Announced plan to increase investment in Brazil and Argentina by $450 million to more than $2.6 billion by 2015
Announced $2.3 billion investment in U.K. manufacturing facilities over the next five years to support production of low-carbon emission vehicles
Announced $400 million investment in South Africa to support production of Ford’s next-generation compact pickup truck and Puma diesel engine
Confirmed $400 million investment in Chicago Assembly Plant and the addition of 1,200 jobs to support production of the next-generation Ford Explorer
Ford reports first-quarter net income of $2.1 billion, or 50 cents per share, a $3.5 billion improvement from first quarter 2009. Pre-tax operating profit of $2 billion, or 46 cents per share, a $4 billion improvement from first quarter 2009++
Ford Automotive operations posted first quarter pre-tax operating profit of $1.2 billion, a $3.2 billion improvement from first quarter 2009++
Ford North America reported first quarter pre-tax operating profit of more than $1.2 billion, a $1.9 billion improvement from first quarter 2009; Ford Europe earned a pre-tax operating profit of $107 million, a $692 million improvement from a year ago++
Revenue for the quarter totaled $28.1 billion, a $3.7 billion improvement from first quarter 2009++
Strong response to new vehicles drove the largest quarterly U.S. market share gain since 1977
Ended the quarter with $25.3 billion of automotive gross cash, with operating-related cash outflow of $100 million. Fended the quarter with $34.3 billion in automotive debt
Ford Motor Credit Company reported first quarter pre-tax operating profit of $828 million, an $864 million improvement from first quarter 2009
Based on Ford’s improving performance, the gradually strengthening economy, and its present assumptions, Ford now expects to deliver solid profits this year with positive Automotive operating-related cash flow
For the first quarter of 2010, Ford’s worldwide Automotive sector reported a pre-tax operating profit of $1.2 billion, compared with a loss of $2 billion a year ago. The improvement reflected higher volume and mix, as well as improvements in net pricing across all Automotive segments.
Total vehicle wholesales in the first quarter were 1.3 million, compared with 986,000 units a year ago. Worldwide Automotive revenue in the first quarter was $25.4 billion, up from $21 billion a year ago.
| Financial Strength (Jul-16-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | – | 0.33 | 0.63 | 0.79 |
| Current Ratio (MRQ) | – | 0.39 | 0.77 | 0.95 |
| Long-Term Debt to Equity(MRQ) | – | 19.41 | 22.90 | 135.20 |
| Total Debt to Equity (MRQ) | – | 34.75 | 38.06 | 202.83 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
This is the consensus forecast among 18 polled investment analysts. Against the Ford Motor Co company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 6 | 2 | 7 | 2 | 1 | 0 |
| 4 weeks ago | 6 | 2 | 5 | 2 | 2 | 0 |
| 2 months ago | 6 | 2 | 4 | 2 | 2 | 0 |
| 3 months ago | 6 | 2 | 5 | 1 | 2 | 0 |
| Last year | 3 | 1 | 5 | 3 | 3 | 0 |
The 14 analysts offering 12-month price targets for Ford have a median target of 15.50, with a high estimate of 18.00 and a low estimate of 9.75. The median estimate represents a 30.69% increase from the last price of 11.86.
Source: www.ft.com
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
| SALES (in millions) | |||||
| Quarter Ending Sep-10 | 4 | 29,880.90 | 32,382.80 | 26,676.00 | 26,540.00 |
| Quarter Ending Dec-10 | 4 | 31,376.20 | 36,221.90 | 27,386.00 | 29,100.50 |
| Year Ending Dec-10 | 6 | 116,707.00 | 130,410.00 | 109,316.00 | 108,526.00 |
| Year Ending Dec-11 | 4 | 122,974.00 | 134,600.00 | 115,994.00 | 118,118.00 |
| EARNINGS (per share) | |||||
| Quarter Ending Sep-10 | 10 | 0.25 | 0.31 | 0.10 | -0.28 |
| Quarter Ending Dec-10 | 10 | 0.30 | 0.39 | 0.22 | -0.07 |
| Year Ending Dec-10 | 17 | 1.33 | 1.60 | 0.94 | -0.49 |
| Year Ending Dec-11 | 15 | 1.56 | 2.05 | 1.11 | 0.22 |
| LT Growth Rate (%) | 4 | 16.80 | 24.30 | 5.00 | 4.00 |
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=F
Investment Highlights
Ford recently announced key executive appointments to further sharpen its senior leadership team’s focus on the “One Ford” plan and to support the Company’s growth around the world.
The changes affect Ford’s Global Manufacturing & Labor Affairs, Ford of Europe, Global Marketing, Sales and Service, and Latin American operations. The moves include:
John Fleming, Ford executive vice president currently serving dual roles as chairman and CEO of Ford of Europe and head of Global Manufacturing and Labor affairs, will lead the company’s Global Manufacturing & Labor Affairs operations; Stephen Odell, currently CEO of Volvo Cars, is appointed a Ford group vice president and succeeds Fleming as chairman and CEO of Ford of Europe; Stuart Rowley, CFO of Volvo, becomes CFO, Ford of Europe.
All three appointments will be effective upon the closing of Ford’s sale of Volvo to Zhejiang Geely Holding Group Ltd., expected to occur later this quarter.
Jim Farley, currently Ford group vice president of Global Marketing and Canada, Mexico and South America operations, will take an expanded role as Ford’s global leader for marketing, sales and service around the world. This marks the first time Ford has a single global leader for marketing, sales and service. The move is effective Aug. 1.
In parallel, Ford is reorganizing its operations in Canada, Mexico and South America. Effective August 1, Eduardo Serrano, currently president and CEO of Ford of Mexico, is appointed executive director, Latin America, with responsibility for the Company’s operations in Mexico and South America. David Mondragon will continue as president, Ford of Canada. Both Serrano and Mondragon will report to Mark Fields, Ford executive vice president and president of the Americas.
OUTLOOK
Ford said it continues to make progress on all four pillars of its plan:
- Aggressively restructuring to operate profitably at the current demand and changing model mix
- Accelerating the development of new products that customers want and value
- Financing the plan and improving the balance sheet
- Working together effectively as one team, leveraging Ford’s global assets
Overall, Ford said its performance this year is off to a more encouraging start than anticipated. Based on Ford’s improving performance, the gradually strengthening economy, and its present assumptions, Ford now expects to deliver solid profits this year with positive Automotive operating-related cash flow.
Ford expects full-year 2010 U.S. industry sales will be in the range of 11.5 million to 12.5 million, consistent with the guidance previously communicated by the Company.
In Europe, Ford now expects full-year industry volume will be in the 14 million to 15 million range, which is somewhat higher than the previous guidance. The change reflects strong first quarter results, although uncertainty remains in Europe about the extent of payback from scrappage programs.
Initial quality improved across all of Ford’s regions based on the latest Global Quality Research System survey. Ford is on track to meet full-year quality targets.
As mentioned previously, Ford has achieved significant structural cost reductions over the past four years, and in 2010 expects full year automotive structural costs to be somewhat higher as Ford increases production to meet demand.
Ford expects full year U.S. total market share and its share of the U.S. retail market to be equal or improved compared with 2009 and Europe market share is expected to be equal to 2009.
Ford expects second quarter 2010 production to be up compared with year-ago levels and up compared to first quarter 2010 production. The increase reflects strong customer demand for its products, the maintenance of competitive stock levels, and the non-recurrence of prior year stock reductions.
Ford now expects Ford Credit’s 2010 profits to be about the same as 2009. The recent improvements in used vehicle auction values and credit loss performance are expected to offset the effects of lower average receivables and the non-recurrence of certain favorable 2009 factors.
Source: http://www.ford.com/
Technical Analysis
Source: http://stockcharts.com
Ford is trading above its 13-day moving average. While this is normally considered to be a bullish sign, the moving average is downward sloping which means that investors have been liquidating shares during this time period and tempers the bullishness of the signal.
Ford is trading near its upper Bollinger Band. This suggests that the stock price is high relative to its recent price action.
The MACD for Ford currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above zero, which implies that the underlying moving averages are trending higher.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| Jul-16-2010 | symbol | Share, $ | $ Mn | 2010 | 2011 | 2010 | 2011 |
| Volkswagon AG (ADR) | VLKAY | 18.62 | 43.31B | 26.06 | n/a | 0.31 | n/a |
| HONDA MOTOR CO. LTD. | HMC | 30.48 | 55.31B | 18.23 | n/a | 0.57 | n/a |
| Nissan Motor Co. Ltd | NSANY | 14.80 | 30.18B | n/a | n/a | 0.35 | n/a |
| Auto & Truck Manufacturers Median | 42.93B | 22.14 | n/a | 0.41 | n/a | ||
| Ford Motor Company | F | 11.86 | 40.40B | 7.82 | n/a | 0.33 | n/a |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHASE ACTIVITY
Inside Purchases – Last 6 Months |
||
| Shares | Transaction | |
| Purchases | n/a | 0 |
| Sales | 1,599,140 | 10 |
| Net Shares Purchased (Sold) | (1,599,140) | 10 |
| Total Insider Shares Held | 797.75M | n/a |
| % Net Shares Purchased (Sold) | (0.2%) | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | 19,083,000 |
| % Change in Institutional Shares Held | 0.93% |
Source: Yahoo Finance
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