jpd80 Posted October 30, 2012 Share Posted October 30, 2012 http://media.ford.com/images/10031/3Q2012_Financials.pdf Ford Earns Record Third Quarter 2012 Pre-Tax Operating Profit of $2.2 Billion, Net Income of $1.6 Billion+ • Best-ever third quarter total company and Automotive pre-tax profit, driven by record North American results; positive Automotive operating-related cash flow; strong liquidity of $34.4 billion • Third quarter pre-tax profit of $2.2 billion, or 40 cents per share, an increase of $200 million from third quarter 2011. Ford has now posted a pre-tax profit for 13 consecutive quarters • Third quarter net income, including favorable special items of $83 million, was $1.6 billion, or 41 cents per share, both about the same as third quarter 2011 • Total Automotive pre-tax profit was $1.8 billion, an increase of $436 million from third quarter 2011 • Ford North America achieved its highest quarterly profit and operating margin since at least 2000 when the company started reflecting the region as a separate business unit, with third quarter pre-tax profit of $2.3 billion and a 12 percent operating margin • Ford Credit reported a pre-tax profit of $393 million, a decrease of $188 million from third quarter 2011, in line with expectations • Announced comprehensive transformation plan to restore profitability in Europe by mid-decade • For the full year, Ford continues to project strong total company pre-tax profit and positive Automotive operating-related cash flow Another impressive result. DEARBORN, Mich., Oct. 30, 2012 – Record profit and operating margin in North America and continued solid performance from Ford Credit drove the best-ever third quarter profit for Ford Motor Company [NYSE: F] as it reports quarterly results today. The company reported a pre-tax profit of $2.2 billion, or 40 cents per share, and net income of $1.6 billion, or 41 cents per share. The company also continued to generate positive Automotive operating-related cash flow, and ended the period with a strong liquidity position of $34.4 billion, an increase of $500 million from the second quarter. “The Ford team delivered a best-ever third quarter, driven by record results in North America and the continued strength of Ford Credit,” said Alan Mulally, Ford president and CEO. “While we are facing nearterm challenges in Europe, we are fully committed to transforming our business in Europe by moving decisively to match production to demand, improve revenue through new products and a stronger brand, improve our cost efficiencies and take advantage of opportunities to profitably grow our business.” Automotive operating-related cash flow was $700 million, the 10th consecutive quarter of positive performance. Ford finished the third quarter with Automotive gross cash of $24.1 billion, exceeding debt by $9.9 billion. This is a net cash improvement of $1.8 billion compared to a year ago, and an increase of $400 million from the second quarter. Automotive debt of $14.2 billion at the end of the third quarter was unchanged from the end of the second quarter. Ford completed its last drawdown of low-cost loans for advanced technologies in August, and began repayment in September. Ford also made payments of $600 million to its worldwide funded pension plans. This included $500 million in discretionary payments to U.S. funded plans in line with the company’s previously disclosed long-term strategy to de-risk its funded pension plans. Dividends paid in the quarter totaled nearly $200 million. Quote Link to comment Share on other sites More sharing options...
Extreme4x4 Posted October 30, 2012 Share Posted October 30, 2012 Short of European results, which everyone knew would be bad.......................... I don't know how anyone can find something bad to say about these results. Oh, and look..................... Ford has started repaying a loan, you know.................. a loan................... those things you qualify for, and pay back with interest (even if it is low interest). Huh, and here I thought Ford had a bailout also?? Guess not. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 30, 2012 Author Share Posted October 30, 2012 "Twelve percent segment margins is just insane," said Jefferies analyst Peter Nesvold, who has a "buy" rating on Ford. He added: "It is hard to believe that any OEM can sustain 12 percent segment margins over the long term." So much for all the bad press surrounding Ford NA's quality lately, Ford is going gangbusters in the USA..... Quote Link to comment Share on other sites More sharing options...
aneekr Posted October 30, 2012 Share Posted October 30, 2012 To say Ford Europe is experiencing serious pain would be a monumental understatement. Ouch! Quote Link to comment Share on other sites More sharing options...
mackinaw Posted October 30, 2012 Share Posted October 30, 2012 A 12% operating margin in North America. incredible! Quote Link to comment Share on other sites More sharing options...
03 LS Posted October 30, 2012 Share Posted October 30, 2012 A 12% operating margin in North America. incredible! Like Alan (Kirby, not Big Al) said, "People will ignore a lot of problems if they love the product." New technologies, such as MFT, DCT, EB engines, are what made peopl love Ford products and willing to pay to own that gave this incredible margin, even with their issues and quirkiness. Take Borg for example, you guys give him flak for being critical and expressing his concerns over F/L products HE BOUGHT, but he is the type of consumers that made such high margins possible. Ford don't want the bottom feeder buyers, the appliance buyers are probly being scared away by the growing quality issues (real or perceived), so what do we do to keep the BORGs we have, and get more BORGs to buy Ford products? Quote Link to comment Share on other sites More sharing options...
aneekr Posted October 30, 2012 Share Posted October 30, 2012 (edited) what do we do to keep the BORGs we have, and get more BORGs to buy Ford products? Institute best in class customer service and warranty programs. Edited October 30, 2012 by aneekr Quote Link to comment Share on other sites More sharing options...
Bob Rosadini Posted October 30, 2012 Share Posted October 30, 2012 Just saw Charles Payne on Fox Business channel. Gave a glowing report on Ford. Indicated he thought stock would soon be in the 12/13 buck range. Likes the fact that people have a high opinion of Ford over the bail out issue, positive opinion of Mulally . Also recognizes strong position of high margin F-150 and success of new Escape. As has been noted on quality thread, hopefully this good news doesn't create a false sense of security. These good numbers will very quickly be yesterday's news. Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted October 30, 2012 Share Posted October 30, 2012 Like Alan (Kirby, not Big Al) said, "People will ignore a lot of problems if they love the product." New technologies, such as MFT, DCT, EB engines, are what made peopl love Ford products and willing to pay to own that gave this incredible margin, even with their issues and quirkiness. Take Borg for example, you guys give him flak for being critical and expressing his concerns over F/L products HE BOUGHT, but he is the type of consumers that made such high margins possible. Ford don't want the bottom feeder buyers, the appliance buyers are probly being scared away by the growing quality issues (real or perceived), so what do we do to keep the BORGs we have, and get more BORGs to buy Ford products? I tend to agree in that German cars have been known to have reliability issues, expensive to fix out of warranty, get poor grades from CR, but still are high on desirability chart and sell well. So pushing the high tech angle may be worth the risk as it has worked for the Germans. Even the more affordable but poor reliability VW brand is doing well. Seems as though many customers will put up with a lot if they see your product as desirable for whatever reason...design, performance, high tech gadgets, or whatever. However, Ford IMO is playing it smarter by making MFT a bit more exclusive on Fusion, and not offering DCT right away anyway. Maybe as option on Fusion ST with 6 speed manual as standard. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 30, 2012 Author Share Posted October 30, 2012 (edited) We tend to home in on what peeves buyers and completely miss all the things Ford is doing right. if quality was as bad as CR suggests, then there's no way FNA would be having its current financial success. This result for Q3 is Ford's US buyers stamp of approval, Ford don't want the bottom feeder buyers, the appliance buyers are probly being scared away by the growing quality issues (real or perceived), so what do we do to keep the BORGs we have, and get more BORGs to buy Ford products? Look at this generation of vehicles compared to the last, Ford is adding value to vehicles and increasing transaction prices, buyers who are price sensitive will cross shop for the lowest price but it seems more people recognise what Ford is trying to achieve by raising the bar on prices and the level of vehicle satisfaction delivered with more complete vehicles. The whole Ford brand has shifted up a notch, the days of chasing bargain basement sales and rental sales are gone, Ford couldn't do that and get 12% margin, it's obviously paying better dividends than dumping cash into Lincoln...... Edited October 30, 2012 by jpd80 Quote Link to comment Share on other sites More sharing options...
atomcat68 Posted October 30, 2012 Share Posted October 30, 2012 If you look at Yahoo's auto ratings by the buyers, the Focus is in the top 5 best rated cars! This surprised me because of the problems that keep cropping up in the news. (DCT, MFT, bad fit and finish) Quote Link to comment Share on other sites More sharing options...
mackinaw Posted October 30, 2012 Share Posted October 30, 2012 If you look at Yahoo's auto ratings by the buyers, the Focus is in the top 5 best rated cars! This surprised me because of the problems that keep cropping up in the news. (DCT, MFT, bad fit and finish) No surprise at all. If you like something, you overlook its idiosyncrasies. Focus owners really like their cars. Spend 20,000 miles in one, as I have, and you'll find out why. Quote Link to comment Share on other sites More sharing options...
Moosetang Posted October 31, 2012 Share Posted October 31, 2012 That press release just gave every guy at GM headquarters E-D. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 31, 2012 Author Share Posted October 31, 2012 That press release just gave every guy at GM headquarters E-D. Phew,For a moment there,I though you meant Ed Whitacre.... Quote Link to comment Share on other sites More sharing options...
Pioneer Posted October 31, 2012 Share Posted October 31, 2012 Take Borg for example, you guys give him flak for being critical and expressing his concerns over F/L products HE BOUGHT, but he is the type of consumers that made such high margins possible. Borg leases on A-plan. He is not a "high margin" buyer. Quote Link to comment Share on other sites More sharing options...
Extreme4x4 Posted October 31, 2012 Share Posted October 31, 2012 Hmmm, GM's 3rd quarter results just made Fords look all the more impressive. Great job Mulally and company !!! Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted October 31, 2012 Share Posted October 31, 2012 Hmmm, GM's 3rd quarter results just made Fords look all the more impressive. Great job Mulally and company !!! How so? GM stock popped just as much as Ford if not more today as they beat estimates also and lost less money in Europe than Ford. And I have hard time understanding the huge investments in China by both companies when profit margin seems so lackluster compared to North America. Ford made only a few million in China after selling over 400,000 vehicles and GM sells over 2 million/year and is lucky to make more than a couple hunderd million dollars/quarter if that. Looks to me like Ford and GM should be investing even more here and less in China where they have to share their meager profits in a slowing Chinese economy. Also heard that 30% of salaried GM retirees took the pension buyout. Sounds like good number to me and should help out GM pension fund a lot. Quote Link to comment Share on other sites More sharing options...
Edstock Posted October 31, 2012 Share Posted October 31, 2012 How so? GM stock popped just as much as Ford if not more today as they beat estimates also and lost less money in Europe than Ford. And I have hard time understanding the huge investments in China by both companies Please define "huge". How does the size of this "huge" investment compare to Ford's other tooling expenditures? IMHO, the Ford investment in China is not "huge", compared to the number and cost of the plants that Ford has around the world. IMHO, Ford's approach to the Chinese market has been incremental over the last half-decade. Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted October 31, 2012 Share Posted October 31, 2012 Please define "huge". How does the size of this "huge" investment compare to Ford's other tooling expenditures? IMHO, the Ford investment in China is not "huge", compared to the number and cost of the plants that Ford has around the world. IMHO, Ford's approach to the Chinese market has been incremental over the last half-decade. When I hear about Ford building two new assembly plants in China and having trouble meeting demand here, it does make you wonder about priority of resources. Part of Wixom sitting empty that could be used to build hybird components so that Ford could sell hybrids in numbers that somewhat approach Prius numbers. Ford makes profit margin here of over 12% and in China probably less than 1%. I understand that GM sells over 2 million vehicles in China to Ford's 400,000 and they have a lot of catching up to do, but there is much more profit here to be made if Ford can sustain 12% profit margin. Meanwhile, another old Ford plant closes in Plymouth Township--the old climate control plant with its hundreds of workers soon to be vacant and eyesore for years to come. Ford is also forecasting an increasing North American auto market for 2013. Mothballed plants staying idle don't make sense in an up market with those kind of profit margins and you can't meet demand. Quote Link to comment Share on other sites More sharing options...
Harley Lover Posted October 31, 2012 Share Posted October 31, 2012 (edited) How so? GM's third quarter net profit fell 14%. Ford's third quarter pretax profit grew by 11%. Can you see the difference in trajectory? It's no coincidence that GM is lagging the market in growth, and lagging the market in profit margin. Edited October 31, 2012 by Harley Lover 1 Quote Link to comment Share on other sites More sharing options...
SoonerLS Posted October 31, 2012 Share Posted October 31, 2012 Part of Wixom sitting empty that could be used to build hybird components so that Ford could sell hybrids in numbers that somewhat approach Prius numbers. Perhaps you should go back and re-read Austin's explanation of why Wixom is permanently closed. Ford makes profit margin here of over 12% and in China probably less than 1%. Meanwhile, another old Ford plant closes in Plymouth Township--the old climate control plant with its hundreds of workers soon to be vacant and eyesore for years to come. Perhaps you missed the news that Ford sold that factory. Hell's bells, they only owned it for the last few years because they had to buy it (along with several others) back to bail out Visteon. Quote Link to comment Share on other sites More sharing options...
Versa-Tech Posted October 31, 2012 Share Posted October 31, 2012 That press release just gave every guy at GM headquarters E-D. Thanks for the tip. I will definitely be investing in pfizer (viagara pharm) in the coming days to take advantage of the increased demand :D Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 31, 2012 Author Share Posted October 31, 2012 (edited) How so? In North America, GM did $37 billion revenue to Ford's $32 billion but the nett results was about the same.......so one company did $5 billion more sales..:shrug?I know it's more complex than that but clearly GM is using more of its revnue on costs and reinvestment in products.... but I cannot confirm that in any of the releases. GM stock popped just as much as Ford if not more today as they beat estimates also and lost less money in Europe than Ford. Stock rises have basically no influence on the operational side of the business And I have hard time understanding the huge investments in China by both companies when profit margin seems so lackluster compared to North America. Ford made only a few million in China after selling over 400,000 vehicles and GM sells over 2 million/year and is lucky to make more than a couple hunderd million dollars/quarter if that. Both are throwing all the profits back into building up assets in China. The fear of missing opt is now clearly greaer than the fear of getting burned by China's government. Looks to me like Ford and GM should be investing even more here and less in China where they have to share their meager profits in a slowing Chinese economy. Also heard that 30% of salaried GM retirees took the pension buyout. Sounds like good number to me and should help out GM pension fund a lot. The one thing I hope is that retirees get looked after properly and that car makers honor agreements that make pension plans fully funded. That way past wrongs are resolved and the Detroit car makers can get on wiith the business of making vehicles and profits. Edited October 31, 2012 by jpd80 Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted October 31, 2012 Share Posted October 31, 2012 Not trying to get into usual GM/Ford pissing match. Just trying to show that GM is not doing that badly, especially with very dated pickups doing battle with Ford's updated one's, and new Chevy pickup due out in next six months or so that should help profits along with new Impala that shouldn't have to be all fleet moslty and post higher ATP's. Ford does a bit better in NA, GM didn't do quite as bad as Ford in Europe, GM does better in China than Ford, and I believe GM makes more money in SA than Ford. So almost a wash worldwide with GM stock up over 9% for day and Ford's up over 8%. Both companies are doing quite well with Ford doing better in NA than Chevy and Cadillac doing better than Lincoln. With 13 new Chevy products coming in 2013, I don't think the future looks that bad for GM if you can give GM a break and look at its products objectively without having Ford imprinted on your brain. Quote Link to comment Share on other sites More sharing options...
Extreme4x4 Posted October 31, 2012 Share Posted October 31, 2012 Overall, taking all costs/profits/revenues into account, worldwide, Ford has an operating margin of about 8%. Overall, taking all costs/profits/revenues into account, worldwide, GM has an operating margin of about 3.6%. Which company would you rather own?? You can talk semantics on everything, but that is the nuts and bolts. Ford downsized/rightsized their business much more than GM has done. Thus, GM's overhead is MUCH higher than Fords. Ford is lean, GM is old school. Incentives to move metal to keep plants open has also eaten into GM's profits per vehicle. BTW, noone is spending more on R&D and product development than Ford is. Yet, Ford has one of the healthiest operating margins of all the automotive manufacturers. BTW2, Ford stock is up about the same as GM's, yet, they have about 4x the amount of outstanding stock, thus, Fords stock is actually up much more. Quote Link to comment Share on other sites More sharing options...
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