Ford Surprises Wall Street With $750M Second-Quarter Earning, First Profit in 2 Years

http://biz.yahoo.com/ap/070726/earns_ford.html?.v=10

 

Ford sold $255 million in South America. That's impressive considering the low end cars that get sold in that part of the world. Europe had $262 million in a much whealthier environment.

 

That is awesome. I hope this isn't a one time thing!

 

Good for FMoCo.

 

Does that include the proceeds they got from sale of various divisions? That was several billion, which, if you take away, would still put them in the deficit.

I admit - I did not read the article

 

They throw a lot of numbers around in the article, I myself, was wondering the same thing....but I think it really is profit from cars. But, like GM, they can't make a profit in NA.

 

Uh-oh... this article caught me wrong in a BAD way... quit reading now if you don't want to hear it.[rant = on, heat = high]

Know what rags my *** about that kind of article?
They dive in with some "analyst" who is supposed to be the "businessman's lighthouse", guiding these businesses and predicting what they will see and how they need to react. Like these wonderful "analysts" are supposed to be omnipotent or something.

In one part of the article, they clearly state that analysts expected Ford to post a loss.
"[Ford] surprised 15 analysts polled by Thomson Financial who expected the company to lose 35 cents per share..."
Instead, Ford posted a gain of 31 cents a share. OOPS.
So all these analysts who live this **** 24/7 and make a living on running other people's businesses were not off a little, but off by a light year, yet they go right on down in the article and ask (YET ANOTHER) analyst about Ford's prospects for the next few quarters.

With a cavalier attitude, "Argus Research Corp. senior automotive analyst Kevin Tynan said analysts were off in their earlier assessments because they were looking at a wide band of estimates for Ford, but added that the automaker still hasn't turned the corner to profitability."
To me, this is saying,"analysts missed it because they were guessing, and that's OK. But, we still don't think Ford will make a profit next time either."
I mean, WTF?!?! That's worse that the weather guy that doesn't look outside his broadcast room window to see if it's raining before he tells the listeners "it's sunny and clear outside".

More of his ingenius statements follow...
"Operating profit from Premier Automotive Group is a good sign "but essentially all of those brands are on the block and up for sale," Tynan said. "Going forward, you will be eliminating that profit."
I guess he knows for sure that the sale of those companies (if they occurr) will not add anything to the bottom line for Ford during those quarters/years. What if they don't sell? I mean, there's so many variables here, but the guy says "the profit is gone".

"Other signs of lingering trouble is the drop in Ford Motor Credit's profit from last year's second quarter and the already massive restructuring of Ford in North America, he added."
So one small subsidiary inside a conglomorate has a less-than-stellar performance, and we must assume the entire corporation is doomed. OK, I'm sure Ford has no plans or ideas to help FMC get profits back into their financing operations... kinda hard to do when you are financing at 0% interest isn't it? Give them a break... if the new products sell like they expect, I think the days of 0% are going to be fewer, and profitability should return to FMC.

""Ford has driven a lot of the costs out of the system already and it's still not profitable," Tynan said. "
Ummm... DUFUS, did you NOT read the headline of the article?!?!
If they can sustain, I'd say they are making money and I call that profitable.

""It really does get more difficult from here. The easy costs are already out. Now, if you need more cost-reduction, especially in North America, where do you get them?"
He's the analyst, why doesn't he know the answer.

You see, there was NOTHING positive from any "analysts" in that entire article.
No apologies to Ford for causing millions of dollars to be removed or not invested in their company because of these analysts "boo-boo".
No concessions to Ford's management or employees for stepping it up and making a difference.
No concessions to Ford for bringing out some new models that are at least getting people's attention and increasing sales while others are trending down.
No positive comments about the STELLAR quality that Ford has been churning out for the last 2-3 years - DESPITE the financial problems, people-cuts, and plant-closings.

I can list a dozen other things, but my point is that these A55holes can totally ruin a business with their comments to the press, their "ratings", and how they direct their investors, and it gripes me to know end that they can not be held accountable for their actions - be they right or wrong.
Not only that, but they show no remorse or emotion for playing a part in such a travesty either.

Yet blindly, the sheeple, investors, and followers of "business" still trust their livlihood and even their existence on the words that come from the mouths of these "analysts".
Tell you what... if I misjudged my personal investments and they performed 200% (that is from gaining .31/share to losing .35/share) dirrent than I expected, I'd FIRE myself!!! I don't spend my entire 40-hr workweek analyzing the stocks and bonds that I buy, and I do better than these guys.

The standard theme is that analysts are all about the negative, and the "save yourself into profitability" models. I say BULLSH1T!!! SPEND yourself into exciting new products that will SELL! Spend money on new interiors and exteriors that people will LIKE! Spend money on advertising the #1 quality raking by JD Power, the #1 safety ratings on several models, the poll results putting Fusion ahead of Camry and Accord, etc.
Don't try to downsize yourself chasing a diminishing sales volume... turn around and make that sales volume go back up by making the right changes to the product and it's delivery to the public.
IMO, You must SELL something to make money... you can not "save and cut" your way into prosperity.

Bottom line - Ford posts a profit, and the press and analysts have nothing positive to say about it - even contiuing to spew more negativity.
Wait 'til we see GM's numbers in a few days.

PS - wonder what it would be like if Toyota or Honda or Nissan were the company that turned the analysts estimates on their ears?

 

This says it all...

"The company attributed the gains to significant year-over-year improvement in all of its automotive operations, and to cost reductions -- including job cuts -- due to restructuring and positive special items that totaled $443 million. That includes a $206 million gain related to sale of its Aston Martin unit. "

 

"Creative Accounting" at its best. I was hoping that Ford's turnaround was happening faster than was predicted by the company. If that was the case it would be a real surprise.

 

that is still not money from the sale. that is money they saved by eliminating that chunk from the cost base...(ie, rent, labor, materials, etc)

the special items category is all special savings such as money saved from the buyouts and not having to pay pensions and such. there was still a pretax profit of +483mil when you factor in vehicle sales vs cost alone, which is a hell of alot better then last year, which was -291mil for the quarter...

 

Agreed... I was just answering muckz' question about the sold division and the revenues being accounted for - that's all.

 

Those fixed operating costs are going down yet again once Ford gets its UAW negotiations finalized. Say goodbye to the jobs bank!

 

Please prove what you have said. This article is from an SEC report. It doesn't get any more official than that. Also, Ford would be held severely accountable if they used "creative accounting," or in other words, if they just flat out lied.

BTW, what would they have to gain from that. Please mow me over with your fantastic insight.

 

You're obviously holding a severe bias against Ford, but this post is blantantly ridiculous.

"Creative Accounting"? "Ford's turnaround happening faster"?

The former charge is quite dumb considering it's from the Security and Exchange Comission. The latter is just as dumb when you look at how the other US automakers are fairing based on initial predictions.

I've been bashing Ford more than anyone here over what seems to be an internal desire to run the company into the ground. However, between Ford all but pulling out of the rental business and successfully becoming more of a retail company, and Ford selling off their so-called distracting divisions (which I was intially against in no uncertain terms), I will even admit that Ford seems to be the 2nd US automaker that apparently is turning a corner (behind Chrysler and pay-all-it's-debt, sugar-daddy Cerberus).

GM is still losing money, but not nearly as bad as before and it has products in the pipeline that will no doubt stop the red ink. But at the moment, Ford Motor Company is the only US automaker posting a profit. Looking at where they have been the past year or so, that's no mean feat.

 

Accounting at Ford is a fine line between making the UAW think they are going belly up before the September contract talks and keeping the stock price above $7 a share.