Seeking Alpha

Strong year by Ford ends with a whimper

  • Ford (F -0.2%) saw trucks and utilities sell well again in December as passenger cars lagged.
  • Sales by brand: Ford +1.6%; Lincoln +8.1%.
  • F-Series sales rose 8.4% to 74,592 while Fusion sales were up 26.6% to 24,408. Taurus, Focus, and Fiesta all saw a big drop in sales during the month compared to a year ago.
  • A feather in Ford's cap, the automaker fully expects to end the year as the top selling auto brand in the U.S.
From other sites
Comments (16)
  • rwbrown.bvf@gmail.com
    , contributor
    Comments (95) | Send Message
     
    It is good to see continued strong F-series sales against new models from GM & FIAT!
    3 Jan 2014, 10:04 AM Reply Like
  • tcbracing
    , contributor
    Comments (305) | Send Message
     
    $8K on the hood will do that...
    3 Jan 2014, 10:33 AM Reply Like
  • scabalqu
    , contributor
    Comments (264) | Send Message
     
    I was in the market for a car in December 2013. Using COSTCO's new car program, I signed up for Ford, Toyota and VW.

     

    Guess what? I ended up buying a Toyota because the Toyota salesperson tried harder to get me into a car. The Ford salesman called me and gave up after the first call. As a Ford investor, I was both dismayed and and disappointed at the lack of effort that the Ford salesperson tried to deal.

     

    No wonder that Ford had a disappointing December.

     

    PS. Once I got my car from Toyota, I didn't need to visit the VW dealer.
    3 Jan 2014, 01:31 PM Reply Like
  • PharmPicker
    , contributor
    Comments (132) | Send Message
     
    Seems like the strangest way (i.e., going with whichever salesperson tries the hardest to get you to buy their product) I've ever heard of to decide on which car to buy. When I bought my last automobile, it was based upon A) which appealed to be most in terms of looks and price and B) which felt the best when test driving it. I've never once considered buying an automobile because of how hard the salesperson is trying to get me to buy. In fact, if they are incredibly pushy, I will walk away and buy the same car elsewhere. The only place that their desire to sell me a car fits into place is when it's time to negotiate the final price. If they really want to sell me the car, they'll come down to the price I'm demanding.

     

    Not to mention, you're talking about a sample size of 1 person. Who is to say that the Ford sales people in my area weren't the exact opposite? Maybe that particular model is in such demand it didn't require a hard sell? Maybe that particular person was just terrible at sales. Maybe that particular dealer doesn't do well. Maybe that particular model and program wouldn't have gotten that salesperson as much profit? Too many variables to consider to believe that your experience with a single sales person has anything to do with why the month was below expectations.
    4 Jan 2014, 08:42 PM Reply Like
  • don'tbugmeplease
    , contributor
    Comments (184) | Send Message
     
    Ford has NO control over individual salespeople. The dealers and sales staff are completely independent. Deal with it. Don't want your Ford stock, sell it. There's lots of folks out there who are looking to buy.
    5 Jan 2014, 03:46 AM Reply Like
  • Tdot
    , contributor
    Comments (4986) | Send Message
     
    Scab - no offense, but if you go to a dealership and don't know exactly what you want, with the options and features you want, not knowing the wholesale dealer's invoice price versus the retail price, along with any incentives, and don't already having financing lined up and ready to go, then you are not doing it right.

     

    The salesperson you get should no more important than the stock boy or checkout clerk at the grocery store. Now if the salesperson you get is condescending or insulting or otherwise impossible to work with, then fine ask to see the sales manager (hopefully it is is a different person).

     

    Going to another dealership because the salesperson was showing a "lack of effort" is ludicrous and laughable, and rather dubious - it reeks of what I will try to gently refer to as, well, made up out of thin air. I mean, who shops like that?
    5 Jan 2014, 09:06 AM Reply Like
  • Remford
    , contributor
    Comments (114) | Send Message
     
    Ford is going to need to find a way to fix its volume imbalance with CAFE coming and to keep stocks in-line, but the good news is that its most profitable vehicles continue to blaze a trail while it retains relative price and incentive discipline.

     

    It will need to make FAR greater inroads into increasing its passenger vehicle value proposition and appeal if it hopes to maintain sustainable, profitable growth - which is 100% in-line with the 2014 business plan that calls for heavy reinvestment. But other makers will become similarly challenged as UAW contracts begin expiring and their meager margins are squeezed further. Any incremental growth GM may have seen likely resulted from employee pricing, stair steps and $500 Costco gift cards rather than organic demand at the prevaimg rate.
    3 Jan 2014, 10:06 AM Reply Like
  • User 8613651
    , contributor
    Comment (1) | Send Message
     
    Here we are again! The so called expert Analysts mis-read the market and come out with estimates they think should be attained and then when it does not happen it is the companies fault and the stock gets punished. Look behind the numbers and see all the positives coming from Ford! See how they have set themselves up for 2014 and beyond. If the traders did that, their tune would be different.
    3 Jan 2014, 10:32 AM Reply Like
  • Tdot
    , contributor
    Comments (4986) | Send Message
     
    It works both ways though. The share price rises and falls with the earnings estimates, usually within a fair P/E channel, when there is a change in the denominator "E".
    3 Jan 2014, 11:51 AM Reply Like
  • cbroncos
    , contributor
    Comments (1265) | Send Message
     
    As I said 2 weeks ago Ford makes too many conservative statements and the market sells off. Now they say sales will be up in 2014. So with estimates of $138.96 billion in sales for 2013 and margins of say 9.5% that would give profits of $13.2 billion. Plenty of cash to up the dividend.
    3 Jan 2014, 12:07 PM Reply Like
  • Tdot
    , contributor
    Comments (4986) | Send Message
     
    Bronco - Ford is saying margins will be down in 2014, and that the expenses will be way up in launching all those new vehicles: first ramping up current model production to build inventory, then shutting down production to change tools, then slowly ramping production back up, then selling off the remaining previous model inventory to clear the lots for the new models.

     

    At the head of this train is the 2015 F150, which generates probably half of Ford's earnings.

     

    Normally this sort of new model change is pretty evenly spaced over several years. This time it is all happening together, and it is unprecedented in all of Ford's History, in terms of launch magnitude and time scale.

     

    They warned ya - it ain't gonna be pretty.

     

    You seem to be calling for 2014 pretax earnings for Ford at $3.30 per share, and presumably (therefore) after tax earnings of around $2.30. By all means, run that up your flag pole and see if anyone salutes.

     

    I'll be sitting down actually reading the newspaper, and the quarterly and annual reports, monthly sales figures, the financial guidance provided by the Company, and the daily press releases. Somebody around here has got to do it.
    3 Jan 2014, 01:30 PM Reply Like
  • stevecan
    , contributor
    Comments (30) | Send Message
     
    tdot,
    Re: "Somebody around here has got to do it." LOL
    Question for you. So based on the fact that things will get "expensive" this year, it may not rattle the sales numbers due to build up before model changeovers....and by the end of 2014 (Oct, Nov, Dec) we may see the results of better than expected sales results enough to mean something nice for the yearly release of 2014's #'s in early 2015. Even the pension obligations should be down further...as well as a prime time to consider dividend increases. Therefore, do you expect that there will be more buyers who understand that early/mid 2014 is the TIME TO BUY Ford Shares because of a fantastic 2015 and 2016...or do you see shortsightedness again.

     

    Lastly, I cannot imaging that with these incredibly low interest rates that you do not see that a stock repurchase plan would be smart. We would be buying back our company at $15-$18 before we all know we will climb to $20-25 in two years. Why wouldn't we just bet the farm and borrow $10 billion now - buy back 20% of the stock - and pay it back in 3 years. The interest rate is low enough.
    3 Jan 2014, 03:41 PM Reply Like
  • Tdot
    , contributor
    Comments (4986) | Send Message
     
    By all means, you are welcome to your hopes and dreams and beliefs.

     

    As for me, I prefer to work with verifiable and sourced information from persons far more authoritative and clever than myself, not so much on personal speculation. If they are wrong, or overly conservative, then great! We win! And we could use some surprise on the up side. But if they are right, we didn't lose anything by believing it.

     

    If you want to wander away from the guidance, then fine. But if you are wrong, you lose. Good luck and best wishes in your investment strategies.
    4 Jan 2014, 12:09 AM Reply Like
  • mrdirt
    , contributor
    Comments (634) | Send Message
     
    incentives to lure buyers were up in December by an average of 4 percent in December compared to the same month last year, according to auto information and pricing provider Kelley Blue Book (KBB), to $2,676. The higher the incentive rate the lower the profit margin for each vehicle sale.

     

    According to KBB, Chrysler Group LLC was the only manufacturer to reduce December incentive spending, by 9.4 percent to $2,954. Ford was the leader last month, boosting incentives a whopping 21.7 percent to $3,346. American Honda Motor Co. and the South Korean auto-making duo Hyundai Motor America and Kia Motors America also increased their incentive spending in the double digits: 14.8 percent (to $1,902) and 17.9 percent (to $1,741) respectively.
    3 Jan 2014, 06:41 PM Reply Like
  • Tdot
    , contributor
    Comments (4986) | Send Message
     
    But GM still had the highest incentives in all the industry, at $3,657 - even though it was up "only" 3.8% from last December. By the way, GM had the highest incentives last year as well, at $3,522.

     

    You could say that Ford simply moved up a little to be slightly more competitive with GM's runaway incentives.

     

    http://bit.ly/1bDX26M
    4 Jan 2014, 12:14 AM Reply Like
  • rwbrown.bvf@gmail.com
    , contributor
    Comments (95) | Send Message
     
    Tc, After putting something like $10,000 on all the 2013 GM trucks, they are already having to heavily subsidize the "brand new" 2014 models!
    Tdot, thanks again for trying to keep the record straight!
    4 Jan 2014, 10:59 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs