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Citigroup analysts have high hopes for GM earnings, not so much for Ford

  • Citigroup expects a big Q2 earnings beat from General Motors (GM -0.2%) but is somewhat less optimistic about Ford's (F +0.1%) results when the two automakers release their financial results on Thursday.
  • The firm lifts its Q2 EPS estimate for GM to $0.63 vs. $0.57 consensus, led by North America, where it forecasts $1.7B adjusted EBIT (~11% margin excluding recall costs) on higher production/truck mix, exceptional pricing (Q2 ATPs up more than $600 Q/Q) and arguably easier structural cost comparisons; unlike last quarter, 2014 guidance should suggest an accelerating H2 EBIT pace consistent with GM’s June update.
  • Cit's Q2 EPS for Ford is reduced to $0.36 mostly on taxes vs. $0.36 consensus, with pre-tax auto EBIT at $1.7B; although the firm isn't expecting an earnings beat, it believes the quarter/outlook could still result in upward 2014-15 Street revisions.
Comments (19)
  • rijensen
    , contributor
    Comments (383) | Send Message
     
    Now, who was it that handled the sales of GM stock for the government?? I'm sure it was JPM, but who was that other Bank... Oh wait it was Citigroup! Now I'm sure they have absolutely no interest in promoting one auto company over another..
    21 Jul, 12:40 PM Reply Like
  • Remford
    , contributor
    Comments (105) | Send Message
     
    It's a chicken and egg. The ONLY value GM has is what others gave it at the expense of every legitimate maker. Even I could make a few billion from $60B or so - and I wouldn't even need to spend a decade blowing off and hiding liabilities. The fact that GM will repay victims with money it didn't even earn is almost as appalling as those who've turned deaf ears to both the bailout AND willful negligence. But it does show that nothing can't be overcome by a few more grand on the hood - despite being what fomented GM's death spiral to begin with.

     

    Despite needing to compete with its failed and bailed competitors, and being directly in the midst of changing over two of its most important products, Ford continues to do exceptionally well in maintaining both margins and share and will be right-footed in almost all significant product cadences.

     

    Undoubtedly, GM apologists will try to dismiss Ford's investment year in relative comparisons while hiding behind every cent of its product liability blips - which remain uncapped. Strange how GM did nothing to change despite being bailed out and its professions of religious awakening and was perfectly proud if itself until February - when it wasn't.

     

    Every cent GM profits from its incompetence comes at a cost several times that sum to legitimate businesses.
    21 Jul, 01:15 PM Reply Like
  • rijensen
    , contributor
    Comments (383) | Send Message
     
    And the fact that they changed their opinion in less than 60 days when GM has had sooo much good news lately and all the news for Ford has been bad.

     

    Even look to the cherry picking on how they qualify the opinion. "(~11% margin excluding recall costs)" Yea, you can really exclude recall costs because they won't amount to anything.

     

    I feel sorry for the GM analysts who work at Citi and have to swallow this.
    21 Jul, 01:32 PM Reply Like
  • mikeRetirement
    , contributor
    Comments (139) | Send Message
     
    Doesn't matter who handled the stock sale. Their estimate will either be right or wrong come Thurs. I'm going to be enjoying the short covering on GM.
    Long GM and F
    21 Jul, 03:17 PM Reply Like
  • Snoopy1
    , contributor
    Comments (1107) | Send Message
     
    @rijensen,

     

    I don't think you understand it works. C isn't going to get more equity underwriting from the gov't and the gov't doesn't care about what the stock does now that they are fully divested.
    21 Jul, 12:58 PM Reply Like
  • rijensen
    , contributor
    Comments (383) | Send Message
     
    I think I understand just fine. Do you really think that Citi's view did a 180 in less than 60 days without so sort of political pressure. But of course Citi doesn't care what happens to the price, you're right. Because there has been nothing but good news in the last 2 months with no more recalls or bad news for GM.

     

    http://bit.ly/1yQVdBm

     

    http://bit.ly/1yQVggw
    21 Jul, 01:16 PM Reply Like
  • Snoopy1
    , contributor
    Comments (1107) | Send Message
     
    The stock is moving up despite the recall "bad news". Importantly, sales haven't been negatively affected.

     

    Citi analysts are like most, they were bearish and now turn bullish AFTER the stock moves up. The time to buy is when everyone hates a stock and the bad news is out.
    21 Jul, 01:56 PM Reply Like
  • Jerome Schindler
    , contributor
    Comments (3) | Send Message
     
    What hopes does Citigroup have for Citicorp - now worth about 10 cents on the dollar from a time when the consensus of analysts was that Citicorp was a "coree holding" of any portfolio.
    21 Jul, 01:24 PM Reply Like
  • JayXu
    , contributor
    Comments (260) | Send Message
     
    How does that have anything to do with GM's value?
    21 Jul, 05:15 PM Reply Like
  • Killerangel
    , contributor
    Comments (4) | Send Message
     
    Much Much Much rather be in Ford's shoes going forward than GM's...they got alot of costly recall problems to solve. Ford is picking up worldwide and introing a significant number of new models including the 2015 Mustang icon.
    21 Jul, 01:24 PM Reply Like
  • Tdot
    , contributor
    Comments (3578) | Send Message
     
    But GM has all that Free Cash, not to mention several years of tax-free earnings to dodge any taxes and pocket the cash!
    21 Jul, 03:17 PM Reply Like
  • cbroncos
    , contributor
    Comments (912) | Send Message
     
    Why does the author omit the good news from Citi on Ford? Well here it is:

     

    Our updated Q2 EPS is reduced somewhat to $0.36 mostly on taxes (vs. $0.36 street). Our pre-tax auto EBIT stands at $1.7 billion with FMCC at $0.5 billion. Regionally, we estimate NA at $1.9bln, S. America at a loss of $0.2bln, Europe at a loss of $0.1 and AP at a $0.3bln profit. In NA, we expect slightly negative pricing. Although we’re not forecasting a big Q2 beat, we believe the quarter/outlook could still result in upward 2014-15 street revisions (Citi > street) as: (1) Ford’s updated ‘14 N.A. guidance might imply a stronger Q4 exit rate than consensus; (2) AP results could further signal upside to ‘15 consensus; (3) Progress in Europe might do the same. We’re lifting our already > consensus ’15 EPS to $2.11 resulting in our target rising to $21 from $19. Seeing that we’re not forecasting a Q2 beat and that the stock has performed well, the immediate reaction to the quarter could initially be modest, however, Q2 data points should support further H2 share price momentum.
    21 Jul, 02:50 PM Reply Like
  • cbroncos
    , contributor
    Comments (912) | Send Message
     
    This is the 2nd increase in Ford's stock price in the last 3 days. Go Ford!
    21 Jul, 02:51 PM Reply Like
  • lemm
    , contributor
    Comments (291) | Send Message
     
    According to yahoo chart,at close,GM 37.43+0.02,F 17.70-0.02.
    21 Jul, 04:37 PM Reply Like
  • roswelllion
    , contributor
    Comment (1) | Send Message
     
    Much rather be in Ford's shoes. Look at growth potential worldwide. While GM has great share in China they are maxxed out while Ford is growing. Ford will turnaround Europe much quicker than GM. GM does have two big advantages, they got us to pick up their debt [or screwed debt holders] and I think they still have some sweet tax advantages from the restructuring, but those are non operational. I'll take the Blue Oval here.
    21 Jul, 04:56 PM Reply Like
  • vick4717
    , contributor
    Comments (82) | Send Message
     
    GM is one up on Ford with their new SUVS, a segment where Ford can not even come close to competing with them. And the profit margin is big on these vehicles. The last sales results showed Ford losing ground and GM sales grew even with the recalls. I am long on GM and would consider Ford on a pull back.
    21 Jul, 05:25 PM Reply Like
  • starcorral
    , contributor
    Comments (404) | Send Message
     
    The title was as far as I got. But then I read it all to amuse myself further. This is an old story: CITI is built on a history of criminal negligence just like GM. This is certainly no odd couple. There is much to be made by lying, deceiving, and paying a pittance (tax deductible slaps of the wrist) when you get caught. Faving GM over Ford? If this could be packaged in a standup comedy routine I'd buy tickets front row center.

     

    Unlike 90% of the people who write these assinined articles, I went out and bought cheap classes so that I could see beyond the end of my nose.

     

    Over the next few years I suggest people watch the growth in price of Ford shares outpace that of General Murders. A human life is worth a few hundred thousand to GM; Ford places no dollar amount on human life. They learned their lesson with Explorer years ago. General Murders will still sell their grandmothers to a band of rapists for eleven cents. And Citigroup will still defraud anyone you offers them the opportunity.

     

    When I sold C for a modest game, it was good riddance. Like many wise have said before: "Are you sorry you did it, or sorry you got caught? My upbringing does not allow me to own C or GM.
    21 Jul, 05:38 PM Reply Like
  • Budavar
    , contributor
    Comments (1387) | Send Message
     
    A memorable pair of criminals helping each other =
    Their "opinions" are not worth the paper they are written on.

     

    Trust the average Joe investor does not get sucked in by
    this criminal duo = again!
    21 Jul, 05:51 PM Reply Like
  • JayXu
    , contributor
    Comments (260) | Send Message
     
    Unbelievable that ppl would mix personal feelings with investments to the extent that they turn blind and turn into whining machines...
    22 Jul, 09:12 AM Reply Like
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