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Auto Earnings Week: FCA(27th),GM(25th),and Ford(26th)

Discussion in 'Mopar News' started by Alexbucks, Jul 23, 2017.

  1. Alexbucks

    Alexbucks Guest

    Earnings time tomorrow morning.......GM (25th).......strangely average Analysts estimates are for FCA and Ford profits to fall (Q2 2017 vs Q2 2016).....I expect FCA to "beat the street".

    Ford on the other hand may go down on Wednesday (taking FCA stock with it) due to Wall Street feeling Ford isn't doing enough actions (to Wall Street's liking) together with pessimism talk /voice/messages about the Industry.
     
  2. Alexbucks

    Alexbucks Guest

    GM Earnings Q2 2017 VS Q2 2016 (Automotive EBIT results):
    GM North America.....Revenue of $28,437 billion with EBIT of $3,475 billion(Q2 2017)VS Revenue of $30,222 billion with EBIT $3,745 billion(Q2 2016).

    International Operations (includes China JV's).....Revenue of $3,215 billion with loss of $120 million (includes restructuring expenses/India-Africa Pullout cost) VS Revenue of 3,342 with EBIT of $190 million.

    GM South America: Revenue of $2,297 billion with loss $103 million VS Revenue of $1,639 billion with loss of $118 million

    Europe/"Discontinued Operations": Revenue of $5,005 billion with loss of $1,053 billion (includes "contract cancellations"/restructuring cost related to PSA Sale....otherwise loss is $218 million)(Q2 2017) VS Revenue of $5,649 billion with EBIT $100 million (Q2 2016).

    http://services.corporate-ir.net/SE...lcmFsTW90b3JzQ29tcGFueV8xMFFfMjAxNzA3MjUucGRm
     
  3. DAGAR

    DAGAR Active Member

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    For those of you on this side of the pond, change the commas to periods in Alex's numbers.
    ...otherwise contraction as expected - it will be interesting to see how Ford and FCA faired...
     
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  4. Prabhjot

    Prabhjot Active Member

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    Ford CEO Starts Turnaround With Profit Beat, Lifted Forecast (at https://www.bloomberg.com/news/articles/2017-07-26/ford-s-stale-lineup-a-roadblock-for-new-ceo-charting-turnaround )

    Really funny how Ford (in Europe over the last few years) and evenmore so now is just going where Marchionne has been trudging along for YEARS already (tight tight capital investment, trimming/rationlaizing model lines, trying to be brand-first, matrix like highly flexible management structure and culture, etc.)

    This has been commented on earlier too, very rightly imo:

    Opinion - Ford follows Fiat-Chrysler by dashing away from the humdrum | Autocar (at https://www.autocar.co.uk/opinion/industry/opinion-ford-follows-fiat-chrysler-dashing-away-humdrum )

    Does THAT not suggest, simply, that Ford too ought to consider the wise Confessions of THE fellow Capital Junkie, Marchionne,.....before things get too un-manageable-by-the-Ford-family (financially) aka the next usa-market recession/meltdown?? I jest of course. Still, a priori WHY would Ford not, other than founder family vanity, that is?
     
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  5. DAGAR

    DAGAR Active Member

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    That Ford earnings beat looks good on the surface, but dig a little deeper and the picture is not nearly so good. the positive is that Ford Financial had record profits. But other than that the improvement year over year was driven by a decision to burn overseas tax credits (rather than save them for a rainy day as Fields had). This makes the new CEO Hacket look like a winner in the short term, but it speaks to desperation to appease the street. Don't have the detailed numbers yet, but it looks like both North America and Europe were down significantly and overall the reduced operating profit is down over $0.6 billion. I think it's going to get worse at Ford before/if it gets better. Personally I don't feel Ford is well situated to tackle the automated vehicle market and that it has been and will be a distraction from fixing the underlying business.
     
    #6 DAGAR, Jul 26, 2017
    Last edited: Jul 26, 2017
  6. Erik Latranyi

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    Ford has 9 consecutive quarters of positive earnings in Europe. It seems that they know what they are doing.
     
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  7. Deckard_Cain

    Deckard_Cain Active Member

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    Here's the Autonews article about Ford's first semester.

    Ford's Q2 net income rises 3.7%; Europe profit falls (at http://europe.autonews.com/article/20170726/COPY/307269934/fords-q2-net-income-rises-3-7-europe-profit-falls )

    A few tidbits:
    - Ford's second-quarter profit margin of 5.9 percent dropped from 7.7 percent a year ago.

    - Ford also was profitable in Europe, though its $88 million pre-tax profit there was 81 percent lower than a year ago.

    Oh boy. things are not looking good for Ford right now. The european profit dropped like a rock and their profit margin tanked. Things do not look good.

    Meanwhile, if any of you is interested in knowing, PSA has increased their profit margin to 7.3% and they're extremely dependent on the european market, not even have a presence in the US market and have been loosing sales in China. Those are very impressive numbers for an european manufacturer without a strong premium brand and prove that there's money to be made in Europe. Now if only FCA would look at what they're doing, which is not very different from what FCA did before.
     
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  8. Prabhjot

    Prabhjot Active Member

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    GM had its core operating automotive earnings drop 17odd%, too: whatever these accounting 'figures' are worth. GM also has a multibillion dollar charge they will have to take in connection with the Opel sale: later this year, i beleive?

    FORD minus Ford Financial (itself a very very sub-optimal use of Ford capital, imo, given the compressed margins and with-notable-risk too in that business) looks terrible, as it is and already.

    Ford in europe, where its recent profitability has been almost exclusively on the back of delayed (both PSA and esp FCA were and are years ahead of it in rationalizing the European business) model-lines-dropped, plants shutdown, downsizing workforce, is now hit by the brexit blues too. FORD has long ago already lost its #4 in europe position to FCA (all brands) and the gap between #3 and #4 is still increasing AFA i can makeout, with fca so much stronger on the higher-margins stuff and getting stronger fast (namely: Jeep+AlfaRomeo+Maserati+Abarth): expansion of european net margins for fca in this the last phase of Marchionne's rationalization of brands+models, manufacturing locations etc in europe, capacity utilization and 'operating leverage' etc begun already in 2004/5.

    FORD is large in China, but that yields little given how much they've invested (and the 50-50 jv-s compulsory in China): they face epic margin pressure in China. Ford loses big-ish money in india where too they're hugely over-invested, poorly managed imo, AND imo incapable of changing things around for a fair while yet.

    i.e., Both GM and Ford are on the 'keep Wall Street at least minimally happy' treadmill: and that treadmill (flat to very down stock prices over the last year or two) is just getting faster and harder, imo. GM has had to sell Opel, stop operations in India and elsewhere (earlier), Ford will likely have to follow suit with more drastic (eg., also withdraw from india, taking a large charge when they do so) action as well, since other than usa pickups, one or 2 cuv-s and their usa finance arm: everything else they do (or not) seems to yield next to nothing, globally, if that! At a time of sales and margins compression slowly underway (intensifying in 2018?) in their usa businesses, ALREADY, and there is NO usa recession yet, nor any large increase in usa interest rates either (coming soon enough, though?)
     
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  9. Prabhjot

    Prabhjot Active Member

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    Just as jest (i realize they are not really comparable this literally): the gap between Ford's share price ($11.01) on the nyse and Fca's ($11.78) just keeps getting wider from hereon, yes/no?? We'll get good indications from fca's results tomorrow. They are EXPECTED to beat analysts 'consensus' estimates handily, as they always have done, so they'd better not have any bloopers. ;-)
     
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  10. 77 Monaco Brougham

    77 Monaco Brougham Active Member

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    Sorta makes you start to wonder if Adam Jonas is going to bed these days having sweet sweet dreams of a marriage of FCA and PSA-Opel.

    Only problem is......for the traditional first dance of the newlyweds......who leads?......Carlos or Sergio ? ? ?:p:D
     
  11. Deckard_Cain

    Deckard_Cain Active Member

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    I'm betting we'll see tomorrow great news from EMEA, Asia-Pacific and Latin America for FCA. I think the US results will be stagnant.
     
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  12. Deckard_Cain

    Deckard_Cain Active Member

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    Well, FCA rebuffed PSA. When Marchionne said they were open to a merger, PSA spoke to them and were rebuffed. The Agnellis and Marchionne want to get into GM at all cost.
     
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  13. 77 Monaco Brougham

    77 Monaco Brougham Active Member

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    Who's to say that Marchionne's supposed blood lust for GM isn't just another one of his famous diversions / misdirections?

    As for PSA-Opel......it's not entirely out of the realm of possibility that Marchionne is meerly employing the old romantic tactic of "playing hard to get".
     
  14. Erik Latranyi

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    Yes, combining the brands of GM with the brands of FCA is a great idea......they manage all their brands so well currently.................
     
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  15. Prabhjot

    Prabhjot Active Member

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    Yes GM remains not-a-potential mate but maybe (next round, in say 2019?) more of a (slightly) 'target'/'prey'.

    'Hostile....' to GM family- or state-ownerless management, though surely likely to be welcomed by 'wall street' when and/or if those moves happen?

    Or so 'one' imagines/speculates, based on comments, including somehwat recently by both john Elkann and Marchionne. I know of at least one very large and very reputed Investor (in both Gm and esp fca) who is sounding evermore 'convinced' about this, as he well might of course admittedly.

    Or VW? And/or PSA? etc

    The 2008 automotive industry crisis completely changed things. It ought to be of little surprise that the ending of the 2008 revival, epic though it's been for FCA, Ford and GM too (in the usa), also yields to big and uncanny changes in the industry, again, both in the usa and in europe.

    Largely because of unbelievably mediocre managements (at ford and gm, emphatically not fca) NOT having implemented all its lessons at-all or properly or on-time, just when the post-2008 print-money/QE/negative-real-interest-rates etc business cycle is slowly ending surely.

    Let's see.
     
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  16. 77 Monaco Brougham

    77 Monaco Brougham Active Member

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    Whoever is writing your material right now should get a bonus.:D
     
  17. 77 Monaco Brougham

    77 Monaco Brougham Active Member

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    This is about a whole lot more than just "back-end synergies".

    There's also a little thing called compability of cultures......both corporate and social. Of the companies you mentioned, it would seem VAG is a good fit in terms of product, but TERRIBLE in terms of corporate/social culture. GM.....although an easier fit on the corporate/social culture side......would be a poor fit in terms of product.

    By default......of the three you mention....PSA-Opel is the hands-down better fit both in terms of corporate/social culture and product lineup....not to mention that each company complements the other geographically.
     
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  18. Prabhjot

    Prabhjot Active Member

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    You have little idea what (a) the french state and (b) french unions are like, man, when you suggest that!! ;-)
     
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  19. Erik Latranyi

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    PSA is no longer a good fit product-wise, as its acquisition of Opel makes PSA very European heavy. Add to that an FCA which is European heavy and you have a poor fit.

    PSA would have been a better fit before the Opel deal, but not anymore.....in my opinion.

    "Back-end synergies".......we are 8 years into FCA and only Renegade shares an architecture with a Fiat. CUSW Cherokee and Pacifica share with no other vehicle. Giorgio has not spread beyond Alfa. Yes, some LX bits are in Maserati. But that is the extent of the "synergies".

    Right now, they share a lot of parts, like infotainment. But that is Henry Ford style synergy, not 21st Century synergy.
     
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