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Ford August U.S. sales

  • Ford's (F) unit sales +12.2% to 221,270 vs. estimates for a 10% gain.
  • Retail sales were up 20% during the month.
  • Ford brand sales rose 12.7% during the month, while Lincoln sales edged 0.6% higher.
  • For the month: Trucks +18.4%; Utilities -0.2; Cars 17.5%.
  • By model, Fusion has its best August ever with 24,653 vehicles sold while the smaller-sized Focus, Fiesta, and C-MAX all sold well. (PR)
Comments (5)
  • Mark T. Phillips
    , contributor
    Comments (495) | Send Message
     
    Share price doesn't mean anything, look at market capitalization.
    4 Sep 2013, 09:46 AM Reply Like
  • m122369
    , contributor
    Comments (29) | Send Message
     
    Good point :) Ford is still growing faster than TSLA.
    4 Sep 2013, 09:48 AM Reply Like
  • Tdot
    , contributor
    Comments (4234) | Send Message
     
    OK let's look at the numbers.

     

    US sales in August were up 12.2%, about 24,021 additional vehicles.

     

    Meanwhile July sales were up 11.4%, or 19,749 additional vehicles.

     

    Let us assume September US sales for Ford will also be up on the order of 12% and maybe 22,230 additional vehicles over last year.

     

    For the third quarter then we can project Ford should sell about 66,000 more vehicles in the US than in 3Q12. Those should be worth on the order of $330M in additional profits, or about 8 cents per share.

     

    Last year Ford earned 40 cents per share in the 3rd quarter. The analysts, apparently predicting a fall slowdown, are calling for 36 cents, with a high of 42 cents.

     

    Based just on projected 3Q US sales, assuming the momentum continues in the US, and assuming the rest of the world just sort-of breaks even or perhaps shows a modest profit, Ford's 3Q13 earnings should be approaching 44 cents conservatively, maybe 48 cents tops.

     

    Meanwhile Ford projects building 50,000 additional vehicles in the 4Q13 - those should be worth an additional $250M in profits, or 6 cents per share. Last year 4Q12 Ford earned 31 cents, and was projected to hit 33 cents. Adding 6 cents should place Ford close to the 40-cent range.

     

    With the 1Q and 2Q coming in at 41 and 45 cents respectively, and the 3Q and 4Q heading conservatively towards 44 and 40 cents, Ford should end the year close to $1.70 per share, maybe $1.75, and approaching $7B total.

     

    That suggests a fair price target range of $17 to $21 in the next 6 months.

     

    Of course there are all those pesky "special items" that always seem to get thrown in, and Ford still has factories to close and write off in Europe, which makes for some big one-time cash and non-cash charges against earnings. And the politicians are talking about a 60-90 day warfare period in Syria, which is likely to get the oil speculators a little worried. Which tends to drag down the Dow Industrials, and Ford with it.
    4 Sep 2013, 11:41 AM Reply Like
  • cbroncos
    , contributor
    Comments (1109) | Send Message
     
    Nice analysis! It was not too long ago that the "analysts" were calling for $1.68 for 2014 earnings. So what will 2014 hold for Ford? Will there be a 20% growth rate for them like this year? If so that would boost earnings towards $2.10 per share. With an almost certain boost to the dividend and a greater rate of earnings Ford should get a P/E of 15 which would give us a stock price of $31.50 per share.
    4 Sep 2013, 12:54 PM Reply Like
  • Tdot
    , contributor
    Comments (4234) | Send Message
     
    Well, they are calling for $1.75 now on average, and one is reaching out for an even $2.

     

    Without a working crystal ball, until Ford provides some sort of guidance on production levels, and global profitability guidance for 2014, it is all just pointless swags.

     

    We prefer actual data-driven estimates, based on the known trends and announcements.

     

    Right now, Ford is close to being tapped out on maximum production in the US. Adding Fusion to Flat Rock Assembly adds maybe another 100,000 units for 2014, for maybe another 10-12 cents per share in profits.

     

    Meanwhile Europe is still staggering, trying to resize and rationalize production rates. Maybe they only lose a billion and a half this year instead of an even two, and only lose a half billion next year.

     

    Ford-Asia is growing fast,and is now producing at a little over a third of Ford-US production; but profits in Asia on small cars are still very slim. Maybe Asia breaks even in 2013, and produces half billion in profits in 2014, offsetting Europe's losses.

     

    So it all comes down to the US, earning somewhere between $1.75 to $2.

     

    We'll just have to agree to continue to disagree on your hypothesis that P/E should be 15, a high tide number that Ford has never been able to sustain.

     

    I prefer to think of P/E in the 10-12 range as a good, stable floor and ceiling. And if/when the storm clouds start to loom again, that drops back to 8-10.
    5 Sep 2013, 10:12 AM Reply Like
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