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Can’t wait to see what Wednesday’s news brings…. $GGP on Monday, $F on Tuesday…..

Biggest news for Ford?

Another $2.3B in debt repayment this Q which ought to finally be enough for them to get an investment grade rating. When that happens, we can expect to see the dividend resumed.

Here is a very interesting line from the release:

By mid-decade, Ford expects that about 6 million of its global vehicle sales – or about 75 percent of its total volume – will come from vehicles built on five vehicle architectures: B, C, C/D, full-size commercial van and compact pickup platforms.

That is straight out of the Japanese model. Remember the old saying about $TM and its Camry/Lexus cars? Salespeople would say they both start out the the same at the plant but one turns left to finish and the other goes right at the assembly plant. $F is doing the same things here. The same parts are going to produce 75% of its vehicles with the finishing touches differentiating them. That leads to huge cost efficiencies and will support the margin growth I expect to see at $F going forward.

If you listen to the questions from all the talking heads, one thing sticks out. They still think this $F is the same $F of 20 years ago. Look at what Mulally has done. He admittedly took the last few years fixing both the brand and the balance sheet and did both wonderfully. Now he has focused on growth with some of the best vehicles on the market (safest, best mileage and reliability ratings). I think they will be accepted faster and on a larger scale that most people think…..

Here is the release:
Ford MidDecade Outlook Calls for Global Sales Growth, Stronger Margins, Expansion in Asia (click to open pdf)

Here are the videos, ignore 95% of what the commentators say and focus on Mulally:

Regarding earnings…..$F will beat estimates in the upcoming Q. Do not even worry about it..

Or, as reader Scott (@scottmurray1) says:

http://corporate.ford.com/news-center/news/press-releases/press-releases-detail/pr-ford-indias-phenomenal-figo-pushes-34731

Once again, the Thai-built Fiesta helped massive gains in the Pacific area. Increases of 82%, 313%, and 373% were recorded in Indonesia, Thailand, and Malaysia respectively.

http://corporate.ford.com/news-center/news/press-releases/press-releases-detail/pr-ford-china-sales-jump-14-percent-34745

Ok, so what am I trying to say here? F sales in May were flat in the U.S. but continued to grow overseas. In fact, Euro sales were down in q1, but in q2 they are up!

“Overall, Ford’s total European sales in its 50 markets were 128,500 units in April, up 6.8 per cent or 8,100 units on April last year.”
Ford sales in April in the growth markets in the European region continued to grow. Ford sales in Russia, Turkey and Eastern Europe rose by 31, 51 and 36 per cent, respectively. Ford posted a market share of 15.3 per cent in Turkey in April, a record April for Ford in the country.

If you start adding up the additional cars sold in May over 2010, and you take into account a 14% increase in April, it is beginning to look like another beat in 2Q. Ford’s 2Q was .68 in 2010, but the analyst average is for .63. Did the analysts forget 17B in retired debt costs? Or do they just do their models based purely on the F-Series? The way they talk, it’s all about that model in the U.S. and nothing else matters.

But wait a minute. They sold 7k more trucks in April over last year. So I guess that at the very worst they are flat on the F-Series. But way up on the Explorer.

Ok, I’m now sufficiently confused. How did they invent the .63? If Euro sales are higher than q1, Asia sales are higher, India sales are higher, even the much maligned Euro sales are higher, U.S. sales are higher…..and production is being ramped even higher in q3….

He is dead right (we should also note here he NAILED Q1 earnings to the penny at $.63…..none of the other “analysts” cam even close. Ford will beat in Q2 barring a collapse in June that I do not see coming at all. It is almost as if Ford in their kinds is recognizing zero benefit from the massive debt repayment AND the price increase in its vehicles over last year. Those tww, if everything else just tread water would lead to Q2 2011 increases over 2010.

Here is what is happening. In Q4 2010 $F execs got lambasted for not giving guidance they could easily beat. Being creatures that learn from mistakes, they, going forward will provide such guidance. So, when after Q1 they said it might be the best profit of the year, they were not serious, they were setting up the beats for the rest of the year. Now, the analysts still have not caught onto the change and obviously are not going to do the work themselves to figure it out so the stock and their recommendations of it have languished.

I am very sure that will change pretty quick when Ford reports Q2