Ford (F) -2.5% AH after its CFO says international losses would triple in Q2, primarily because...

Ford (F) -2.5% AH after its CFO says international losses would triple in Q2, primarily because of much weaker European sales, and it could close an assembly plant in Europe should demand keep falling. Ford lost $190M in Q1 in its overseas operations, with Europe accounting for nearly 80%; it had forecast Q2 international losses would be roughly the same as Q1.

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Comments (13)
  • pwise
    , contributor
    Comments (12) | Send Message
    28 Jun 2012, 05:16 PM Reply Like
  • timoates
    , contributor
    Comments (13) | Send Message
    Long on F keeps getting longer and longer.
    28 Jun 2012, 05:48 PM Reply Like
  • Tdot
    , contributor
    Comments (8675) | Send Message
    Another example of nervous short term investors panicking and stampeding the exits in a mad rush to attempt to redeem small profits, or to try to avoid showing a loss, on a triple witching trifecta of weekly, monthly, quarterly, and first half results.


    F was UP 7 cents or 0.7% at market close, then DOWN 36 cents or 3.6% an hour later in aftermarket panic trading.


    Meanwhile long term investors look on in sad amusement: watching the shorties elbow each other out of the way, crash the line to the ride, stomp on little girls in ponytails (and stealing their candy), and climb over the mounds of dead bodies (they do eat their dead).


    Another opportunity to buy low.
    28 Jun 2012, 05:55 PM Reply Like
  • brigar6
    , contributor
    Comments (24) | Send Message
    I agree nervous investors getting out/taking profit, I've always tried to be loyal and hold my stock(s) especially when they start nose-diving (I used to be one, sell off type), I still feel stupid being a market lemming, I still wish I was as smart as the ones who held onto stock and didn't panic/protect. I dumped my DNDN at $37.00, than again at $33.00 and although I didn't quite trample anyone on the way out, I do have some remorse from bailing out on my brother investors, whom held. ( it slipped a little down to 6ish, but the comeback should be in full swing around 2019.
    F going to hit 9 or lower , why wouldn't anyone not want to free up dead money.
    Bought latest F purchase back at 10.08, jumped ship panicked at 10.46 as it started the journey downwards, prob get back in low 9's, any advice so I can stop being one of "those" investors?
    28 Jun 2012, 08:47 PM Reply Like
  • Tdot
    , contributor
    Comments (8675) | Send Message
    Ya know, it's like all these folks that are freaking out and declaring that the Supreme Court's ruling on Obamacare has finally destroyed the last remnants of civilized capitalism, and the liberal democrats and communists have taken over the Federal Government. Like this is the first time the pendulum has swung to the left in the US. When Bush II was elected and re-elected, the Hollywood Liberals wailed and screamed bloody murder, and threatened to leave the country, pendulum swings right. When Obama was elected, and Obamacare passed and approved, the fiscal and social conservatives did the same. Pendulum swings left. Guess what happens next!


    So Ford will lose money in the European operations, due to too much supply and not enough demand. And nobody wants to be the first to slow down production and lose money ... this is a surprise? It looks like Ford has decided to take the lead and slow down their production to meet demand, and that is going to cost them a boatload in additional losses, since there are still people to pay under contract to do nothing. Why should investors be surprised?


    The economic news in (socialist) Europe has been consistently bad for over 2 years now, as folks that have been consistently told that they are entitled to free rides (regardless of the economy) are cashing in on their social benefits. It is like a bunch of vampires feeding off each other ... the blood / money runs out pretty quick, as those that are working have to pay not only for their family expenses, but their neighbor's as well. They cannot get any traction.


    So Ford and GM and Fiat and Renault and all the rest are going to lose some money, because few in Europe can afford to buy cars and also pay for their neighbor's room and board. Why should investors panic and Ford shares drop? Who didn't see this coming? Oh yeah - ignorant short term investors with blinders on, apparently expecting magic to happen and save them from losing 30 cents.
    29 Jun 2012, 05:34 AM Reply Like
  • Ryandan
    , contributor
    Comments (1594) | Send Message
    "another opportunity to buy low" ?


    just like the one GM traders had as GM disappeared into bankruptcy.


    you want to see panic, watch Ford below 8..................
    29 Jun 2012, 08:32 AM Reply Like
  • Tdot
    , contributor
    Comments (8675) | Send Message
    We can only hope for Ford below 8. It is like when fresh bread and eggs are 79 cents at the supermarket! Buy Buy Buy!
    29 Jun 2012, 08:43 AM Reply Like
  • mitchjl
    , contributor
    Comments (288) | Send Message
    Will continue to hold and waiting on $20.00 p/s
    28 Jun 2012, 07:01 PM Reply Like
  • LithMike
    , contributor
    Comments (18) | Send Message
    What is GM going to do if F is incurring this type of loss? They are in much worse shape.
    28 Jun 2012, 10:43 PM Reply Like
  • sethmcs
    , contributor
    Comments (3546) | Send Message
    Sold in F May and went away. At some price F is a compelling buy. Will wait till after F reports earnings in July. I am still upset F over the closure of Mercury and how they screwed up the Linclon brand. I think they abandoned the old fart segment who supported those brands.
    28 Jun 2012, 11:43 PM Reply Like
  • mookix00x
    , contributor
    Comment (1) | Send Message
    Well Ford will not completely shut down. This is actually pretty good for the long term investors. They'll be waiting for the prices to fall now to buy at great prices. When Ford comes out with new products and Europe's economy gets better, they will be benefiting.
    28 Jun 2012, 11:49 PM Reply Like
  • Tdot
    , contributor
    Comments (8675) | Send Message
    One additional point of interest...


    In previous quarters, fussy Ford investors complained loudly that Ford did not provide sufficient guidance with warnings of possible coming losses on the next quarterly report, and Ford shares dropped suddenly and violently as a result, with short term investors threatening to sue for their losses. And Ford executives (Mulally et al) were blamed for hiding the truth or something and engaging in insider trading or some such thing.


    So here we have a Ford executive providing guidance on 2Q results a month in advance! Same result.
    29 Jun 2012, 06:00 AM Reply Like
  • Tdot
    , contributor
    Comments (8675) | Send Message
    The full Guidance Q&A text:


    Q. Let’s begin by looking back for a moment. Can you remind us where we stood at the end of the first quarter?


    A. We had a good first quarter and start of the year – with a strong pre-tax operating profit of $2.3 billion. It was also our eleventh consecutive profitable quarter. Our North America results were superb, including the highest profit since at least 2000 and a very strong operating margin. Ford Credit also had another quarter of solid profitability. South American profitability declined due to the increasingly competitive environment while we saw Europe operating in a very tough environment, incur a loss. APA posted a much smaller loss mainly reflecting continued investment in new products and facilities across the region.


    Q. With a few days before we wrap up the second quarter, has the situation improved at all for our operations outside of North America?


    A. What we are seeing today is a very strong North America and Ford Credit, and at the same time, increasing pressure on all other business operations. For the second quarter, we expect the company to be profitable for the twelfth consecutive quarter and to achieve positive operating cash flow for the ninth consecutive quarter, but operating profit is likely to be substantially lower than the same period a year ago.


    Q. Why will operating profit be lower?


    A. As I noted in our first quarter earnings call, we expect to see increased costs in the second quarter associated with new product launches, as well as additional capacity coming on line in North America and Asia Pacific Africa. Volume and revenue benefits will not be fully seen for these investments until the second half of the year. We do expect good results in North America and Ford Credit to generate a solid profit once again, but our operations outside of North America are under increasing pressure.


    Q. So, do we expect to lose money in the second quarter outside of North America?


    A. We do. Our loss for the second quarter for the combined results of South America, Europe and Asia Pacific Africa could be about triple the $190 million loss in these operations in the first quarter of the year.


    Q. Is there a single reason for the deterioration?


    A. No there is not. The issues we are facing outside North America are somewhat different by region. Let me break down the regions and the reasons for the loss.


    In South America, not only are competitive and pricing pressures growing, but we also are faced with weakening currencies, and unexpected and adverse changes in government policies affecting areas such as trade and access to foreign currency.


    In Europe, the situation has deteriorated significantly since we gave our guidance at the beginning of the year. Given our strong presence in Europe, we naturally find ourselves swept up in the very serious economic crisis impacting the region. This is now compounded by an intensifying competitive environment as manufacturers react to the lower consumer demand and excess production capacity. As a result, we have experienced a decline in margins, and we expect this pressure to continue for the foreseeable future.


    In Asia Pacific Africa, we continue investing and paying for future growth, while not yet fully realizing the revenue of new products and facilities. While volume is up for us, our investment and growth costs are rising faster.


    Q. Has Ford changed its full year guidance?


    A. We expect to be solidly profitable for the full year and to generate positive operating cash flow, thanks to continued strong performance in North America and Ford Credit through the balance of the year.


    We will provide a comprehensive update on our 2012 outlook, as usual, in our earnings announcement in the latter part of July.


    Q. How could this affect our progress as a company?


    A. We live in a changing world and our business changes quickly, but our team thrives in that environment. That’s when we do our best and perform at our best. So I think we should simply understand the business is going through change and that we’re going to deal with it. We’ve got a great plan that is perfect for us to handle these types of situations and we’ve proven in the past that we know how to address them and do so decisively. So, yeah, we have new challenges, but we’re going to come out stronger once we work our way through all of this.
    29 Jun 2012, 07:40 AM Reply Like
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