FORD Earnings Projections

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted May 31, 8:13 am

This thread is meant to hold all major discussions and projections
about Ford's quarterly earnings in an easy to reference single spot. I
am sure all posters will appreciate any feedback provided.

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted May 31, 5:56 pm

Ok - so here is my first Official Projection and a loose summary of
how I arrived at it:

Projections for Ford's 2nd Quarter Income (excludes Special Items and
extra-ordinary)
1st Quarter 2010 Operating Revenue: $28.10 Billion
2nd Quarter 2010 Operating Revenue: $31.02 Billion

Based on 1,353,000 vehicles sold (versus 1,253,000 first quarter)and
average increase in per vehicle selling prices due to mix of higher
priced vehicles and increase in average options selected.

1st Quarter Operating Income (Automotive): $1.20 Billion
Adjustments:
Based on 100,000 more vehicles sold versus 1,253,000 sold in the
first quarter.
Gain in profitability by spreading $8.3 billion in fixed costs over
8% more vehicles
$8.3 billion / 1,253,000 vehicles = $6,624.10/vehicle
$8.3 billion / 1,353,000 vehicles = $6,134.52/vehicle
Improved profitability per vehicle due to fixed costs: $489.59
Total Increase in profits on 1,353,000 vehicles sold: $662.4
million
Less increased costs of incentives for quarter: -$156.0
million
Profits due to average increase in prices of vehicles sold $203.0
million
(Increased) Decreased Net Interest Expense (9% of $495 million) +
$44.55 million
Net change in profitability - Automotive Operations $753.9 million

2nd Quarter projected operating income Automotive: $1.95 Billion
2nd Quarter projected operating income Ford Credit: $0.93 Billion
Combined profitability of Ford $2.88 Billion

Note 1: Ford Credit's profit increase due to increasing leverage
ratios, lower credit losses and increasing average selling price of
wholesales on end-of-lease vehicle resales.

Note 2: This does not include special items, one-time items or extra-
ordinary items as I don't try and predict those.

[£σҝі from Toronto]

JT: Originally posted Jun 1, 1:04 am

Great Info Loki, what do you see this translate into in share price
change? JT

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Jun 1, 8:55 am

Hey JT - good to "see" you here.

I am unsure about the effect on share price. The profit should
actually overwhelm Mulally's statement that Ford will be solidly
profitable for 2010 and indicate that this guidance was pretty
conservative. It should also indicate that Ford is on the path to
produce closer to the high end of my estimates last year that 2010
would be an $8-10 billion year for Ford provided the economic recovery
is not derailed. And I doubt, once again, that the consensus
estimates will be high enough so it should come as a pleasant surprise
for the markets.

As you know my target path for Ford shares was to $25 per share within
three years (that was forecast late last summer so we are almost one
year into that projected path) and I thought it would get about 2/3
there by this summer so around $16.00. I figured the rest of the
growth would be slower as Ford would have to demonstrate resilience as
GM and Chrysler duke it out to regain market share, demonstrate it
continues to have great products in the pipeline, and the economic
recovery would have to solidify and show a US market that may not
reach its "glory days" but stabilize in at least the 14-15 million
vehicles range annually.

However - given the anxiety in the market and the continued
uncertainty about the economic recovery over the winding down of
stimulus plans - it seems that all bets are off on the share price
trajectory. I truly am at a loss on this one. Ford's current market
cap is roughly $40 billion and if I am right they are going to hit
around $10 billion in profit this year. That's a forward PE of 4!!!
coupled with a likely promise of strong profit growth over the next
couple years as the US market moves from around 11.5 million annual
vehicles sold to around 15 million. Think about it - that's an
increase of over 30% in two years and you can bet that Ford's profit -
if it keeps pace with that market growth - should be faster than that
(remember - it's growing faster than that in Asia and South America -
so Europe is the only question mark to be resolved in terms of
growth).

So that's why I am puzzled. I think Ford shares should be solidly at
the $14.00 plus range before the announcement and head to $16.00 or so
after the announcement although that level just seems to spur the
shorters. That being said - where are we right now and how correct are
my projections with the current share price? What can I say?

PS> I do note that I have not completely taken into account increased
materials/input costs and determine how that will affect Ford's
margins so I may have to refine the above calculation.

[£σҝі from Toronto]

wijram: Originally posted Jun 1, 11:01 am

Hey Loki~

As always, nice work.

My one cautionary note relates to the significant decline we are
seeing (April) and are likely to continue to see in sales in Europe.
Likely to be in that 15 - 20% range for the quarter and perhaps
beyond.

Really not sure how that will translate into impact on the quarterly
earnings, but do expect that it will be noticeable.

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Jun 1, 12:46 pm

Yes wijram - I hear you. I am kind of with mixed minds on this
front. The fall off should not impact this quarter's earnings as we
have seen no signs of a decrease in Ford's planned production levels
(again - if anyone sees something please post a link - particularly
for Europe).

And purchases of higher end cars is actually picking up in Europe so I
am wondering how long the fall-off will last. It did not last that
long for the US but of course the stimulus program only lasted what -
one and a half months in the US? The question is always - is the
program robbing from the future or simply eliminating the delay for
those sitting on the fence who had delayed their normal purchase?

Still trying to figure that one out - but unless there has been a
production change should not impact this quarter's profits - that will
be an item for 3rd and 4th quarters, but we will have a better idea of
what Ford sees in another 6 or 7 weeks.

[£σҝі from Toronto]

wijram: Originally posted Jun 1, 1:23 pm

Loki~

Regarding your notation that you have not accounted for increases in
materials costs, etc. ~ not seeing much evidence that those increases,
while expected, have yet been realized. Again, certainly something to
be vigilent regarding, but probably something that will not impact
until later quarters.

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Jun 1, 5:11 pm

I agree wijram. Certainly saw some evidence of higher contracts being
signed for steel suppliers due to rising costs of coke, iron ore etc.
but that kind of sizzled out as rapidly as it started. Of course
there was the deep drop-off in industrial metals prices into March
2009 - but I don't think anyone was able to sign long-term contracts
at those prices. And we are still below the price levels of 2006,
2007 and 2008 prior to the fall-off even though there has been a
significant rebound in prices - still about 20% below those years.

So as Telly Savalas might have said - you got a long way to go baby -
before there is a likelihood of impacting profits. And as long as
there is solid economic recovery - I actually see no reason why that
should change Ford's profitability trajectory as selling prices should
keep pace. I mean - it's not like Ford alone faces those kind of cost
pressures.

[£σҝі from Toronto]

Micheal: Originally posted Jun 24, 2:35 pm

Loki in Europe there will be a change in profit. Look at the Euro its
down more then 15%.

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Jun 25, 11:28 am

Yes - I guess that will have an effect Michael - but Europe
contributes so little to Ford's profit (only $107 million last
quarter) that this will only have a $15-16 million impact. In
addition, some more work on Ford's incentive spending this quarter
suggests it will be around $1.6 billion versus $1.42 billion last
quarter (all are estimates of course). So that's $180 million higher
versus my original projection they would be $156 million higher - so a
$24 million difference.

Combined - that's about $40 million down - not a significant number so
that leaves my projection at $2.84 billion.

In addition - looks like Ford has been slowly decreasing its discounts
from MSRP by around 2 percentage points so that would have a positive
effect on earnings.

Now, as you know I don't forecast one-time or extraordinary items - my
estimates are only on operating profit (before taxes). With the
decline in the Euro - Ford may be tempted to take a writedown on their
Euro holdings, but not sure they need or want to do so at this time.
Conversely - since March of last year the beaver buck has increased by
about 20% versus the USD and Ford has substantial operations in Canada
so if they take a Euro writedown it would seem they should take a mark-
up on Canadian holdings with the two coming relatively close to
cancelling each other out. Not sure.

All in all - I am left scratching my head trying to figure out where
the threats to at least $2.8 billion profit may come from. Anyone
else have any ideas?

[£σҝі from Toronto]

Ken Savage: Originally posted Jun 25, 12:45 pm

I dont have any ideas you asked for. Total mystery. July has to be
better than June, possibly, not sure of anything. .02 percent on cash
is not a good option. Gold looking likr Gold by the minute. Eh nom
to eat, prefer eating.

[£σҝі from Toronto]

edin: Originally posted Jul 9, 7:45 am

2.88B in profit appears somewhat high.
likely its 2.6B
( with a modest LOSS in Europe for the Q)

........
side notes;

Fiesta ad. cost were huge for the Q with only 1,000 sales for the
month.
& Net change in CASH
also needs to be discussed
Im unsure if VEBA 3.8B in Cash was paid on 6-30 or in July for the Q
trends
Transaction costs UP,
in US June was better vs. May ,,,
Topline beat is obvious,
same for bottom line eps beat
& spin of Net Cash change will be key

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Jul 13, 7:43 am

This was posted in the main thread on Friday July 2, but I thought I
would keep a copy in here for our earnings projections record.

Begin post:
I don't see the jobs report as negative. The private sector of the
economy is finally manufacturing net new jobs in spite of the rise in
new jobless claims (which as I pointed out yesterday - was largely
caused by the loss of about 205,000 Census jobs).

Regarding Ford Earnings - you can see my updated projects in the other
thread started for earnings projections. Although Europe's sales have
weakened, Ford did expect that and has given no indication of any
changes in planned production (provided in last quarter's earnings
report) other than an increase of 15,000 for North America.

I have asked if anyone has seen some report of Ford production plan
changes - but have not received anything. Therefore - without
evidence to the contrary, I am basically standing with my original
projections with some minor modifications. I have seen nothing that
would indicate any significant lowering of my projections and instead
see mainly things that would reinforce my projections or even put
upward pressure on them. Sticking with the revised number of $2.84
billion, but see the earnings thread.

We now have 4 quarters of positive earnings as follows:
Q1 2010 $ 2.01 billion
Q4 2009 $ 1.75 billion
Q3 2009 $ 1.11 billion
Q2 2009 $ 2.37 billion
-----------------------
12 Month $ 7.24 billion

Now granted the Q2 2009 was actually -424 million operating income
turned to a positive by $2.795 financial gain on debt reduction - but
that quarter will soon be replaced by Q2 2010 that should actually
INCREASE the 12 Month Trailing (TTM) by almost $500 million bringing
us to $7.70 billion.

At a PE ratio of 10 (which I think is very reasonable for a consumer
cyclical in a 2% inflationary environment) gives us a market value of
$72.4 billion to $77.0 billion. Also - when you look at the next
quarter to drop off and replaced by another $2.0 billion quarter (at
least) we get up to $8.6 billion earnings or $86 billion market
value.

So we get share price ranges based on 3.41 billion shares of $21.25,
$22.50 and $25.25.

Fully diluted with about 4.1 billion shares yields share prices of
$17.75, $18.75 and $21.00 respectively.

So that's my pricing ranges. If you think the PE ratio should be
lower anyone can quickly do their own math using the above as a base.
But here are some numbers:

Earnings in Billions
$7.24 $7.70 $8.60
PE Ratio Shares O/S B Share Prices in Dollars
10 3.41 21.23 22.58 25.22
4.1 17.66 18.78 20.98
9 3.41 19.11 20.32 22.70
4.1 15.89 16.90 18.88
8 3.41 16.99 18.06 20.18
4.1 14.13 15.02 16.78
7 3.41 14.86 15.81 17.65
4.1 12.36 13.15 14.68

Hope this helps.

Loki

[£σҝі from Toronto]

wijram: Originally posted Jul 16, 8:41 am

Think Tank & All~

Q2 2010 Earnings Release details have been announced.
----

Details of Ford Motor Company's July 23 Briefing on Second Quarter
2010 Financial Results 07/16 08:00 AM

DEARBORN, Mich., July 16 /PRNewswire-FirstCall/ -- Ford Motor Company
(F:$11.719,0$-0.141,0-1.19%) will release its preliminary second
quarter 2010 financial results at 7 a.m. EDT Friday, July 23.

The following briefings will be held after the announcement:
At 9 a.m. EDT, Alan Mulally, Ford president and CEO, and Lewis Booth,
Ford executive vice president and chief financial officer, will host a
conference call for the investment community and news media to discuss
the second quarter results.

At 11 a.m. EDT, Bob Shanks, Ford vice president and controller, Neil
Schloss, Ford vice president and treasurer, and K.R. Kent, vice
chairman and chief financial officer, Ford Motor Credit Company, will
host a conference call for fixed income analysts and investors. A
listen-only audio presentation and supporting materials will be
available on the Internet at www.shareholder.ford.com.
Representatives
of the investment community and news media will have the opportunity
to ask questions by phone following the presentations.

Access Information Friday, July 23
Earnings Call: 9 a.m. EDT
Toll Free: 866-515-2909
International: +1 617-399-5123
Earnings Passcode: "Ford Earnings" Â
Fixed Income: 11 a.m. EDT
Toll Free: Â 866-318-8613
International: +1 617-399-5132
Fixed Income Passcode: "Ford Fixed Income"
Replays Available after 2 p.m. EDT the day of the event through July
30 at www.shareholder.ford.com
Toll Free: 888-286-8010
International: +1 617-801-6888 Â
Passcodes:
Earnings: 37739096
Fixed Income: 36743554

[£σҝі from Toronto]

Ken Savage: Originally posted Jul 16, 8:51 am

Missed the open by a penny woohoo I knew I was a genius.

Wizard of OZ clip
http://www.youtube.com/watch?v=YWyCCJ6B2WE

Another ABBA in their spiffy outfits
SOS
http://www.youtube.com/watch?v=o9wWs-Khavo

Late day rally? Have a nice weekend all.

[£σҝі from Toronto]

Gotluck: Originally posted Jul 23, 6:17 am

I thought this might be appropriate here.
http://www.marketwatch.com/story/ford-posts-net-income-of-26-billion-...

On Jan 5, 8:26 am, £σҝі from Toronto <lo...@rogers.com> wrote:
> Ken Savage: Originally posted Jul 16, 8:51 am
>
> Missed the open by a penny woohoo I knew I was a genius.
>

> Wizard of OZ cliphttp://www.youtube.com/watch?v=YWyCCJ6B2WE

>
> Another ABBA in their spiffy outfits

> SOShttp://www.youtube.com/watch?v=o9wWs-Khavo

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Sep 2, 7:11 am

So here are my predictions for 3rd Quarter 2010 Operating Income along
with a rough layout of the significant changes from the previous
quarter (Note - Volvo excluded):

3rd Quarter 2010 (Rev in $ thousands)
Revenue Vehicles $/Vehicle (f)
N.A. 14,962,500 570,000 26,250
S.A. 2,619,500 130,000 20,150
Europe 5,874,000 356,000 16,500
A,Pac,Af 1,853,100 213,000 8,700
------------ ---------- --------
Total Auto 25,309,100 1,269,000 19,944
Fin Serv 2,250,000
Total Op ------------
Inc 27,559,100

All dollar values in thousands except per vehicle numbers:
2nd Quarter Auto Operating Income: $2,067,000
Based on 174,000 LESS vehicles sold this quarter than last:
Loss in profitability by spreading $8.3 billion in fixed costs over
174,000 less vehicles:
$8.3B/1,443,000 vehicles (last Q): $5,752 per vehicle
$8.3B/1,269,000 vehicles (this Q): $6,541 per vehicle
Decreased profitability due to fixed: -$ 789 per vehicle
Total Decrease in Profit: -$1,001,000
Decrease in total Incentive Spending: +$ 90,000
Due to decrease in Avg. MSRP -$ 88,000
1/4 share of interest expense savings
from debt reduction end of 2nd Q: +$ 124,000
Net change in Operating Income, Auto: -$ 874,000
Ford Auto Operating Income 3Q: +$1,193,000
Estimated Ford Credit Income: +$ 810,000
Total Operating Income (Before Tax
and Special/Extraordinary Items): +$2,003,000

Ford Credit based on lower volumes of used vehicle sales and new deals
signed, stable credit losses, slightly stronger leverage ratios and
continuing, though more modest, increases in average selling prices of
used vehicles.

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Sep 2, 7:28 am

Now for Trailing Twelve Months:

Summary of preceding post:
Revenues, Auto $25.31 Billion
Ford Credit $ 2.25 Billion
Total Revenues $27.56 Billion
Operating Income, Auto: $1.193 Billion
Op. Inc. Ford Credit: $0.810 Billion
Total Operating Income: $2.003 Billion
(Before Special and extraordinary Items)

Taking my previous TTM (Trailing 12 Months Op Inc.)

Q1 2010 $ 2.01 billion
Q4 2009 $ 1.75 billion
Q3 2009 $ 1.11 billion
Q2 2009 $ 2.37 billion
-----------------------
12 Month $ 7.24 billion

Add In Q2 Actual:
Q2 2010 $ 2.94 billion

Q1 2010 $ 2.01 billion
Q4 2009 $ 1.75 billion
Q3 2009 $ 1.11 billion

-----------------------
12 Month $ 7.81 billion

Now Q3 Estimates:
Q3 2010 $ 2.00 billion
Q2 2010 $ 2.94 billion

Q1 2010 $ 2.01 billion
Q4 2009 $ 1.75 billion

-----------------------
12 Month $ 8.70 billion

So - with a PE Ratio of 7 - 10 we get an enterprise value of $60.9
Billion to $87 Billion. Based on 3.41 billion shares outstanding
that's a share price range of $17.85 to $25.50 while on a fully
diluted basis that's 4.1 billion shares yielding a share price range
of $14.85 to $21.25.

So there you go. Just my guesses and opinions of course. Do with it
what you will. ☺

£σκί
ΙСOΜ

[£σҝі from Toronto]

drunknapoleon: Originally posted Oct 26, 4:33 pm

I don't have any shares of Ford anymore, and don't check in as much,
but I just want to say congratulations on the record profits!

[£σҝі from Toronto]

drunknapoleon: Originally posted Oct 26, 4:35 pm

Looks like I replied to an old thread -- whoops... But regardless,
congrats and good luck in the future!

I have a significant amount in Sirius and KFN now.

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Nov 18, 8:18 am

So - here are my projections for Ford's 4th Quarter Revenues and
Income (JMO of course):

4th Quarter 2010
Revenue ($M) Vehicles $/Vehicle (f)
N.A. 16,815 590,000 28,500
S.A. 2,752 124,000 22,200
Europe 7,100 400,000 17,750
A,Pac,Af 2,062 233,000 8,850
--------------------------------------------------------------
TOTAL AUTO 28,730 1,347,000 21,329
Fin Serv 2,450
ALL FORD 31,180 - so $31.2 Billion Revenue AUTO & CREDIT
--------------------------------------------------------------
Based on 89,000 MORE vehicles sold this quarter than last:
Gain in profitability by spreading $8.3 billion in fixed costs over
89,000 more vehicles:
$8.3B/1,258,000 vehicles: $6,598 per vehicle
$8.3B/1,347,000 vehicles: $6,162 per vehicle
Increased profitability due to fixed: $436 per vehicle
Total Increase in Profit from fixed spreading: $0.587 Billion
Decrease in total Incentive Spending: 0.005 Billion
Due to Increase in Avg. MSRP 0.042 Billion

1/4 share of interest expense savings

from debt pay down end of 3rd Q: 0.038 Billion
----------------
Net change in Operating Income, Auto: +$0.672 Billion
Starting from 3rd Quarter Auto Operating Income: $1.294 Billion
----------------
Forecast Ford Auto Operating Income 3Q: $1.966 Billion
Estimated Ford Credit Income: +$0.825 Billion
----------------

Total Operating Income (Before Tax

and Special/Extraordinary Items): $2.791 Billion
================
Total Operating Income for the 2010 Year
Before Taxes and Special Items $9.798 Billion

Ford Credit numbers based on stable volumes of used vehicle sales and
higher new deals signed, stable credit losses, slightly stronger
leverage ratios and continuing,though more modest, increases in

average selling prices of used vehicles.

So - to recap the numbers:
Revenue Ford Automotive: $28.7 Billion
Revenue Ford Credit: $ 2.5 Billion
TOTAL REVENUE FORD: $31.2 Billion
*Op. Income Ford Auto: $1.966 Billion
*Op. Income Ford Credit: $0.825 Billion
*TOTAL OP INCOME FORD: $2.791 Billion
*TOTAL OP. INCOME FORD for 2010 $9.798 Billion

Note: Op. Income is Operating Income BEFORE Special Items and Taxes

[£σҝі from Toronto]

£σҝі from Toronto: Originally posted Nov 22, 8:02 am

Based on preceding post and $2.791 Billion Op Income for 4th Quarter:
At 3.47 Billion shares that's Operating Income of 80 cents per share.
At 4.1 Billion fully diluted, that's 68 cents per share.

For the full year estimated $9.798 Billion:
At 3.47 billion shares that's $2.82/share operating income
At 4.1 billion fully diluted that's $2.39 per share.

Only the $2.798 4th Q earnings are my opinion, the rest of the numbers
are now all fact.

[wijram]

Hey Loki~

Thanks for rebuilding this thread. MOST Appreciated!

One other change that I believe you will have to take into account
when revising the the last estimate is the REDUCTION in the number of
shares (fully diluted). Think that the number now is "only" 3,439MM
shares.

My source for that number is a report out yesterday from Market Edge
Research.

> > > I have a significant amount in Sirius and KFN now.- Hide quoted text -
>
> - Show quoted text -

[£σҝі from Toronto]

Reposted from the main thread of Monday January 10, 2010 just to keep
in the records of this thread.

And now for the valuation matrix I promised last week. 4th Q 2010 are
my projections and for GM just an out and out guess. No real attempt
to figure that one out.

GM Valuation

Quarterly: Before Taxes and
Equity Income (in $millions) Earnings/Share
Current Diluted
Income 1,500 M 1,566 M
End March 30, 2010 1,302 0.87 0.83
End June 30, 2010 1,562 1.04 1.00
Ending Sept 30, 2010 1,847 1.23 1.18
Ending Dec 31, 2010 (estimate) 2,500 1.67 1.60
---------------------------------------------------------
Projected Income Operations: 7,211 4.81 4.60
=========================================================


Valuation Matrix:
Shares
Current Diluted
1,500 M 1,566 M
PE Ratio 7 33.65 32.23
PE Ratio 8 38.46 36.84
PE Ratio 9 43.27 41.44
PE Ratio 10 48.07 46.05
________________________________________________________


Ford Valuation

Quarterly: Operating Income Earnings/Share
Current Diluted
Income 3,439 M 3,900 M
End March 30, 2010 2,012 0.59 0.52
End June 30, 2010 2,942 0.86 0.75
Ending Sept 30, 2010 2,053 0.60 0.53
Ending Dec 31, 2010 (estimate) 2,791 0.81 0.72
---------------------------------------------------------
Projected Income Operations: 9,798 2.85 2.51
=========================================================


Valuation Matrix:
Shares
Current Diluted
3,439 M 3,900 M
PE Ratio 7 19.94 17.59
PE Ratio 8 22.79 20.10
PE Ratio 9 25.64 22.61
PE Ratio 10 28.49 25.12
_________________________________________________________


Hope this is of some help. JMO of course mixed with some facts.


The matrices suggest that GM is already over-valued at current prices
unless the appropriate PE ratio is 9 or 10 while Ford is only over-
priced when considered on a fully diluted basis and a PE ratio of 7.

Once again JMO and JMI (Just My Interpretation).

[edin]

Q4 10
(will it possibly morning Gap up on Friday
and intraday reversal with heavy volume ??)


EPS .59
Revenue 34B
extraordinary item near 935M bottom line hit
2430M NI
less one time hit
=1495M


still solid Q but not some amazing blowout


...also would be very interested to know new diluated share
count ....
if it drop much below 4100M

(also, this Q & next q1 2011 are the last comparisons with Volvo #
q2 2010 reporting excluded Volvo#s )