REPORT: Wall Street rallies around better-than-expected Ford results
On the surface, at least, news that a company lost $1.4 billion wouldn't normally be greeted as good news by Wall Street. However, the Ford Motor company's just-published quarterly earning reports have done just that, with the stock trading 15% ahead of yesterday and the entire Dow Jones stock market perking up at the news.
Why the positive reaction? The Blue Oval has fared markedly better than most analysts' estimates, and the size of the loss indicates that Ford is at least stemming its hemorrhaging. In further news that perked up trading, Lewis Booth, Ford's CFO reiterated that Ford expects to make it through the rest of the year without seeking any government monies, and the company notes that it expects to actually exceed the $4 billion cost-cutting goals it set for itself this year.
Of course, all is not rosy, although things are better than expected. For the first three months this year, Ford's sales dropped 43%, with accompanying revenue of $24.8 billion – a drop of almost 37 percent year-over-year versus 2008's $39.2 billion intake.
Perhaps the best news of all? Dearborn officials reinforced that the company is looking good to break even in 2011, noting that it could even post a profit before taxes. Thanks for the tips, everyone!
[Source: The Associated Press | Image: Jewel Samad/AFP/Getty]
Reader Comments (Page 1 of 3)
MikeofLA 1:05PM (4/24/2009)
I respect and like Ford more and more these days. This is good news... there's also good news comming out of the real estate industry. New house sales have actually increased!
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Judy Zik 1:29PM (4/24/2009)
Be careful the media fud you buy into. New House sales were up over the previous month. Imagine that. It's called Spring. People hate shopping for houses in the cold winter up North. Oh and apparently retail sales at Home Depot and such are up too this month now that people up North can plant flowers and do other outside projects.
Ford on the other hand is a story that is quite the opposite. Most people would cringe over a billion dollar loss but it is a huge sucess story. With even the mighty Toyota losing money right now almost everyone is in the red right now and Ford's plan didn't call for them to make a profit yet. However it doesn't take too much brains to realize that without the downturn they would have. That means their turnaround is ahead of schedule and they should have no trouble sailing through the rest of the storm. They have ample cash reserves and have stemmed the bleeding. They are no where near bankruptcy or in any kind of trouble anymore. By the Fall when things start to pick up again and they release even more new products they will likely be making profits again well ahead of schedule despite the recession.
Josiah 2:02PM (4/24/2009)
True Judy, however it's these types of positive stories that get people 'feeling better' and when they feel better they buy more, which helps bring the economy out of it's funk even if it isn't based on any practical change.
MikeofLA 2:11PM (4/24/2009)
@ Judy,
I don't really know what your point is, as you basically just agreed with me. Also, the statistics (and most you read) are "seasonally adjusted" thus reflecting a more accurate gauge of what is going on less affected by the warm weather in the north.
One more point, and this agrees with Josiah, The economy is not some natural force like rain or heat. It is a human created monster that is fueled by confidence and stifled by fear. If people relied less on the news to tell them what to feel and more on their own world, I think this recession would have been a lot smaller. The problem lies with the fact that the media (all of it, not just the news) hammers these negatives down everyone's throat and causes a chain reaction. As soon as someone breaks with the norm and starts to find the silver lining things start to warm up again.
By the way, I am not saying that the economy is controlled by the media, I am just saying it is influenced, so no, I am not a "Media is the 4th branch of the Government" wacko/conspiracy theorist
izorro 1:08PM (4/24/2009)
I'm still kicking myself for not buying stock when it was at a 1.80....It's still a bargain though....
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TigerMil 1:12PM (4/24/2009)
Bingo. IT's all about the Benjamins!
FOMOCO is way undervalued. OF course, so is GM (breaking GM up would return more than the value of the stock, apparently). But GM going bankrupt would not give stockholders squat.
Buy Ford stock now...sometime in the next two years it will double or triple its current value.
Len_A 2:16PM (4/24/2009)
F*ck $1.80 - it dropped to $1.01 a share at one point last November. I, too, am kicking myself big time.
andy 1:06PM (4/24/2009)
its nice to hear good news out of Detriot for a change, now Ford needs to get the Fiesta ready for N.America ASAP
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Tang 1:08PM (4/24/2009)
And the Transit and Taurus...
zamafir 1:32PM (4/24/2009)
I'm not sure how much faster they could realistically bring it, i know people want it but let's be reasonable, you don't just federalize a new car over night, and have 30,000 in stock the next day.
Meh, i don't care, my Ford Stock is up 140% :).
henrykrinkle 1:57PM (4/24/2009)
A local dealer (midwest) has about 20 Fiestas parked out front. I just did a quick drive-by and didn't see any window stickers on them so I don't know if they're actually on sale or just on loan to generate interest. Either way, they really grab your attention and look pretty sharp.
SHF 6:37PM (4/24/2009)
@henrykrinkle
No you didn't. There are 100 or so Fiestas in America right now and they are for the Fiest Movement and Ford promotion cars and are the Euro variants (at least styling wise). Fiesta's won't be showing up here until late 2009. You may have seen 20 or so Focus or Fusions, but not Fiestas.
henrykrinkle 10:49AM (4/27/2009)
@SHF:
Yes I did. After a second look, a few had Michigan plates on the back and had the www.fiestamovement.com printed on the back bumper.
donniebyers 1:07PM (4/24/2009)
I guess my decision to buy Ford stock was the right one! C'mon 2011!!! lol.
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jc 2:17PM (4/24/2009)
The UAW also bought Ford stock.
Autoblog's not reported it.Yet.
Sean 1:07PM (4/24/2009)
GM, Chrysler, take notes.
Lots of notes.
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collegekid13 1:08PM (4/24/2009)
so glad ford got into trouble before the others. Now they've out smarter then before with better cars to boot
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Mike 11:59AM (4/25/2009)
I hate to add lumps to GM's already bad rep but the honest truth is that they were in trouble at the same time or even before Ford. GM was cutting jobs a full year before Ford started their turnaround and seemed to stay 1 year ahead of Ford, until Bill Ford hired Alan Mullaly. Mullaly pushed the turnaround and made the hard decisions quickly and Ford rocketed past GM in almost everything. Hell, even this year, while GM's been pondering the direction they want to go to make the government happy, Ford has gotten all the consessions that GM is still attempting to get.
Of course, it's easier for Ford to deal with bondholders, the UAW and dealers because they show promise and that a equity/debt swap may net their investors a better return and they continue to improve product and show no signs of slowing down. Each product is better than the last, nothing is rotting on the vine and they've already gone through the expense of changing their plants to flex manufacturing so they can be flexible and react to the market more quickly.
As much as I'm pulling for GM to come out of this, I just think they didn't make the right moves nearly fast enough and Ford shows that those moves could have been made much earlier.
Yikes 1:13PM (4/24/2009)
Yippie, yippie.
Good news.
Ford ONLY LOST Xbillion this quarter.
ogm this is funny stuff.
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Ed 1:16PM (4/24/2009)
You're not the brightest star in the sky, are you?