DETROIT (AP) - Ford Motor Co. (F) shares fell to their lowest level in more than a year Monday as investors absorbed news that the No. 2 automaker in the United States doesn't expect to meet its profit goals in 2005 or 2006.

Ford lowered its full-year profit forecast on Friday to $1.25 to $1.50 per share from $1.75 to $1.95 per share. The company also said it doesn't expect to reach its goal of hitting $7 billion in pretax profits by 2006.

Ford shares fell 67 cents, or 6.1 percent, to $10.36 in early trading Monday on the New York Stock Exchange. Before Monday, they had been trading in a 52-week range of $10.94 to $16.48.

Merrill Lynch analyst John Casesa continued to rate Ford neutral in a research note Monday. He said Ford's action was expected, but that the magnitude of the cut was surprising. Casesa is predicting an 8 percent decrease in the automaker's second-quarter production - an announcement that could come as soon as April 20, when Ford releases its first quarter results.

Casesa said Ford likely won't see much relief until the second half of the year, especially since Ford will have to follow rival General Motors Corp. (GM) this spring and ramp up incentive spending.

"Given rising raw material prices, rising health care costs and increases in other inputs, the automotive value chain is being compressed not only from the top down, but also from the bottom up," Casesa said.

Standard & Poor's on Friday lowered its outlook on Ford from stable to negative.

Ford's announcement came less than a month after GM, the world's largest automaker, slashed its full-year earnings outlook by more than half, citing poor North American business and rising health care costs.

The two companies, despite a spate of new vehicles in the past year, have struggled with medical and materials expenses and the continuation of heated competition with foreign automakers, particularly Asian brands such as Toyota Motor Corp. and Nissan Motor Co. (NSANY)

Ford said it does expect first-quarter earnings to exceed its previous guidance of 25 cents to 35 cents per share. Analysts are looking for earnings of 36 cents per share when Ford reports first-quarter results next week.

 

well i was hoping not to hear news like this, but other then the mustang wich is selling incredible and the trucks that do well i think the rest of the ford lineup is kinda blah. hopefully the coming release of the fusion and the sport trac will boos sales. ford just doesnt have the mid range family type cars that sell like either nissan or toyota.

 

Actually, with Ford's release and lowering their earningps per share estimate for the year, the fall in stock price isn't too hard to believe.

I agree with Final5, with the exception of the Mustang and Ford Trucks, Ford is not doing that well. I think I've read that the 500 has had increasing sales over the last few months, but they're not selling enough of them.

This is unfortunate news though, the domestic car manufacuturers continue to lose market share. They really need to work hard to change people's perception of American cars.

 

maybe too many investors are still clean and unscheduled?

 

I think the Freestyle will help Ford out in sales. I'm starting to see more of them. The F-150 slaes But, Ford has high medical and pension costs, like D-C and GM, and they are only going to grow. The UAW has to start making some serious concessions, or they are going to slowly choke the hand that feeds them.

 

Those stupid high medical costs. It's just going to get worse, what with the high rate of obesity and diabetes, and everyone knows that these things lead to even worse conditions. People have to start being smart with their health. People might say, "mind your business," but this is everyone's business. I dont want to be paying higher taxes, or losing my medical benefits for it. Teachers, who usually get the best benefits around, are losing them because of the high costs. Soon, no employer will be giving health benefits. The average age of death is dropping! And it's not going to stop. unless people change. It is expected that 1/3 of children will have diabetes in the near future. The U.S. is going to be one big health problem. Big food co.'s and the gov't are part of the problem, but most of it goes towards each individual and parent.
:ranting:

 

I'm not surprised at all. With today's gas prices sales of SUVs and Trucks had to go down. I'm really disappointed with 500 and Freestyle. None of them will ever sell as good as Taurus did. Heck, I think Taurus alone would outsell 500 and Freestyle together.

 

The Fusion looks encouraging, I don't know why they made the 500 so dull. It's a good car, but style counts. I think it's twin, the Montego is fine though. I noticed nice styling in the Mercury versions tailights, interior and front end. However, I'm just not at that advance an age yet to get one, lol.

 

The Five Hundred isn't suppose to outsell the Taurus. The Fusion and Five Hundred would be a better comparison againt Taurus sales. Also, the Five Hundred/Montego/Freestyle aren't being sold to Fleet(s), and they don't have any incentives tied to them.

 

The Five Hundred isn't suppose to outsell the Taurus. The Fusion and Five Hundred would be a better comparison againt Taurus sales. Also, the Five Hundred/Montego/Freestyle aren't being sold to Fleet(s), and they don't have any incentives tied to them.
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Well 500 and Taurus both use same engine, almost same price, and they're both family sedans. Why wouldn't we compare their sales?

 

Well 500 and Taurus both use same engine, almost same price, and they're both family sedans. Why wouldn't we compare their sales?
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Because Ford's business plan was to have the both the 500 and Fusion fill the gap left by the Taurus. By offering a car slightly larger (500) and slightly smaller (Fusion), Ford feels they can better satisfy more consumers. Plus, it isn't really a fair comparison because a huge percentage of Taurus sales are to rental fleets, not consumers. Ford has not had to sell it to rental fleets (nor add incentives) to move the 500 so far. They have the same plan for Fusion. If Ford can continue to move the cars without incentives or rental sales, it will better from profitibility standpoint, even though they may be selling fewer cars.

 

Well 500 and Taurus both use same engine, almost same price, and they're both family sedans. Why wouldn't we compare their sales?
[/b][/quote]

1. From a price point both the Fusion and the Five Hundred overlap (and go over and under) the Taurus’s pricing.

2. From a size perspective the Taurus fit between the Fusion and the Five Hundred.

3. Ford has stated that the Five Hundred (at least in the foreseeable future) will NOT be sold to fleets. At least at the level the Taurus was/is. And from that alone it is unfair to compare sales. I’m not sure of the exact percentage but an extremely high % of Taurus’ were being sold to fleets.


Good discussion!

 

I think the fusion should be a bit more of a success, we'll see how that goes in the fall. I think the 500 is being slow for now, but i think it'll be steady, and probably grow in sales as people get to know it. I'm seeing adds bragging about 5 stars in 4 categories, even without airbags or something like that. I think it'll build up a reputation as a cheap car with volvo safety. The 300 on the otherhand is definitely having quick sales now, but i think that'll slow like crazy, its totally a fad. The 500 won't grow old for a while, i'm already quite tired of seeing 300s, i think they're ugly now.