Ford gets its motor running

With sales strong everywhere but Europe, the automaker's stock won't stay stuck in neutral for long.

By Jonathan Berr Apr 3, 2013 9:46AM
Ford Motor (F), the only U.S. automaker that didn't need a government bailout when the financial crisis hit, just posted its best monthly sales performance since May 2007, thanks to strong demand for the Ford Fusion sedan along with the Explorer and Escape sport-utility vehicles. Shares of the company, however, remain stuck in neutral, gaining less than 1% amid a broadly higher market Tuesday.
The reason is simple: Europe. In its most recent earnings report, Ford forecast that it would lose $2 billion this year in that market, far worse than what analysts had expected. In an effort to stop Ford from hemorrhaging money there, Ford CEO Alan Mullaly is cutting jobs and closing plants in the region.

However, even though Europe will remain a basket case for a while, Ford's North American operations continue to race ahead.

Earnings in the region surged more than 33% last year to $8.3 billion. The company's good fortunes have continued into 2013. March monthly sales rose 5.7% to 236,160, buoyed by demand for SUVs and pickup trucks. Ford delivered 30,284 Fusions and 28,934 Escapes in March, a record. Explorer’s sales totaled 17,509 for the model's best March performance since 2005.

The rest of the Big Three also posted gains in March as consumers become more comfortable with buying new motor vehicles than they have been in some time.

General Motors (GM) delivered 245,950 vehicles in the month, a 6.4% increase, helped by double-digit gains in Cadillac, Buick and GMC. Chevrolet sales were little changed. But those results weren't as good as the 12% gain investors had expected.

Chrysler Group, the smallest of the Detroit 3, reported its 36th-straight increase in monthly sales, hitting 171,606 units in the U.S. in March, a 5% rise. Consumers took a shine to the Dart and Avenger sedans and Ram pickup trucks. Foreign automakers such as Honda Motor (HMC) and Volkswagen (VLKAY) also posted gains as consumers are proving to be surprisingly resilient in the face of the hike in the payroll tax.

Though all the U.S. automakers should continue to do well, Ford is by far the best bet for investors. Analysts are expecting its revenue to increase more than 10% in the current quarter, far better than the 2.4% decline expected of GM. Chrysler is part of Italy's Fiat and doesn't trade separately.

Also going for Ford is its price-to-earnings multiple of 9.2, under its five-year high. Analysts have an average 52-week price target of $15.14 on the stock, a 15% gain over where it currently trades. And to top it off, unlike GM, Ford pays a dividend that currently yields around 3%.

Ford's stock price may not put the pedal to the metal, but it won't stay stuck in neutral much longer, either. 

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.


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90Comments
Apr 3, 2013 11:01AM
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I'll be buying a sportbike :)

 

Buying a new car is just crazy, $25-30k+ prices, no tks

 

Support Ford if you can afford a new one though, they didn't bow to big government.

Apr 3, 2013 12:05PM
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Go FORD !!!  Prove to the American Republic that a Unionized American Car Company can kick A$$ without the need of U.S. Tax Payer Dollars !!!
Apr 3, 2013 10:49AM
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i'm about to buy a ford this weekend.  watch the sales numbers jump next month due to my actions
Apr 3, 2013 1:37PM
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Ford refused bail-out money from taxpayers. They do business the old fashion way, they earn it with private incentives.
Apr 3, 2013 1:47PM
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just bought my awesome 2013 escape......drove the others and no comparison to it.....go FORD...plus its american after paying out the money for wages,parts,ect. the remainder of profit  from sales stays here in the states not to foreign countries. smiling at the others.
Apr 3, 2013 12:21PM
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Ford could sell A LOT more vehicles is they would offer their diesels here in the states like they do in Europe.  A $.50 per gallon fuel increase for diesel is drastically offset by the 40+ miles per gallon that they offer.  Walk in to a Ford dealership and you can't get any valid answers regarding changes except for the "new" engineering to the Escape and other offerings that have been available in Europe for YEARS.  Get with the program!
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My last Ford was 1994 and I had vowed never to buy another. Then much to my amazement, I bought a Ford in 11-2012 and it's a great little SUV, don't regret it one bit and am proud to say it's mine because of how reliant the company has stayed when others have fallen.
Apr 3, 2013 12:46PM
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I'm still holding on to my awesome 2006 Lincoln LS8, while hoping FoMoCo  or Lincoln will produce a new RWD, luxury sports sedan or coupe.

C'mon, FoMoCo. Gimme what I want.

Apr 3, 2013 2:33PM
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all that stock I bought in '08 for 2$ a share is about to pay off. Show me the money ford.
Apr 3, 2013 2:33PM
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Ford makes good cars and has for years. I have owned a 66" Ranchero for 30 years that my dad bought new off the show room floor. The car is absolutely a great piece of machinery and a very collectable car. It's a one year only make and model car. Falcon front end, Fairlane rear end. I have since re built the Hi-Po "K" code motor he ordered with the car. This little 289 now pushed 435 HP with no juice, blower, induction just all motor and chews up the new Cuda, Challanger and Camero.
Apr 3, 2013 1:44PM
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I am happy for Ford. They didn't have to kiss the government cheeks to get a bail out. However they need to focus more on what the world market needs just not what the American market needs in order to be a true success story. I know the world market has a lot of stricker rules regaurding import sales which hurts all American car manufacturers. But if you built it better, cheaper and faster along with styling and performance you will have a winner.
Apr 3, 2013 3:37PM
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I have owned Fords for over 30 years and all have served me well.  Kids are gone now so I decided to downsize and  buy a 2012 Focus hatchback.  Great little car.  I average 33.7MPG per the computer! 
Apr 3, 2013 1:23PM
Apr 3, 2013 4:17PM
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F GMC! I BOUGHT A 2000 FORD CONTOUR AND OTHER THAN A FEW REPAIRS THAT BABY IS STILL RUNNING STRONG. I'VE

HAD GMC CARS IN THE 70'S AND THEY WERE WELL MADE BUT THE 80'S AND 90'S SUCK! HORRIBLE QUALITY AND AFTER

THEIR BAILOUT AND BIG UNION PAYOFFS AND GMC VOLT I'M DONE! FORD WILL GET MY BUSINESS WHEN I NEED NEW CAR!

Apr 5, 2013 5:01PM
Apr 3, 2013 11:08AM
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Add that to the 250,000 deadbeats that go on disability EVERY month !

ONLY DOUBLED UNDER OBUMA !1

14 MILLION DEADBEATS ON "DISABILITY" UP 100% UNDER DEAR LEADER

125,000 jobs gained per month and SURPRISE

250,0000 deadbeats go on disability each month

 

Anyone see any trends ?

Problems , maybe ?

You want to see the future look at Greece. We are broke and every deadbeat on this planet has learned how to play the system. Our Leader ?

He is ALL for it - After all it's his base, isn't it ? 

 

Apr 3, 2013 4:44PM
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Ford still owes the US Government money unlike GM and Chrysler.  Ford, Nissan, and Tesla borrowed money to build more fuel efficient engines and Ford hasnt repaid 1 dime of that money.

 

It was a DOE loan and Ford has $5.9 Billion of it.

Apr 3, 2013 3:01PM
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Ford didn't need a bailout because they were in trouble before GM or Chrysler and went to Wall Street and mortgaged the company down to the trademark. Later on, GM and Chrysler couldn't go to Wall Street during the financial collapse.
Apr 3, 2013 3:52PM
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As a GM retiree, I will not be buying a new vehicle till cola and profit sharing are given to retirees.
Apr 3, 2013 11:06AM
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HERE'S MORE HAPPY NEWS !!

 

The sad thing is the left could care less about the rampant fraud and abuse in the welfare system.

Via :

In 2012, a U.S. Department of Agriculture official said that food stamp fraud totals $750 million each year – a number that more than doubles the cost of trafficking reported in a 2006- 2008 USDA study.

Kevin Concannon, U.S. Department of Agriculture undersecretary for food, nutrition and consumer services, told the Huffington Post last year that food stamp fraud totals around $750 million each year.

The $750 million number is more than double the amount in total dollars of fraud detected annually in a 2006-2008 study on trafficking – a type of fraud that involves selling Supplemental Nutrition Assistance Program (SNAP) benefits to food retailers for cents on the dollar.

“This is $750 million that isn’t being used to provide food to individuals and families and that issue isn’t lost on us. We want to maintain the confidence of American taxpayers because everyone is challenged in this economy – the payers as well as the folks who are benefiting from the program,” Concannon said.

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