April 24, 2017

Ford Motor Company (F) Downgraded by Zacks Investment Research

05 April 2017, 01:56 | Ignacio Smith

Ford Motor Company (F) Downgraded by Zacks Investment Research

Ford Motor Company (F) Downgraded by Zacks Investment Research

March 31, 2017 Ford Motor Company (NYSE:F) released its 2016 annual report, which details the progress Ford made past year in its continued expansion to be an auto and mobility company.

Total vehicle sales were, on average, expected to come in at a seasonally adjusted annual rate of 17.4 million units, down from a 17.6-million-unit rate. One leading indicator investors can watch is consumer confidence, which continues to trend higher, since auto sales and other big-ticket purchases typically remain strong when confidence is high.

Steven Ricchiuto, chief USA economist for Mizuho, said vehicle sales have been a major part of the United States economy recently, and if auto sales fall, consumer spending would also weaken. With Jeep's performance down by 11 percent-thanks to plummeting interest in the outgoing Patriot and Compass and people looking ahead to the next Wrangler-even an incredibly strong month by Dodge and a 100 percent increase in Journey sales couldn't keep the whole team in the black. Sales of the A4 were up 20 percent over March 2016, while the A6 saw an 8 percent increase. Analysts were expecting a 7% increase in unit sales for the month. "But there are several areas of concern this year lurking just below the surface".

No. 1 US automaker General Motors Co (GM.N) reported a 2 percent increase in sales to just over 256,000 vehicles, with sales of its Tahoe and Suburban SUV models seeing their best sales month since 2008.

The broad-based S&P 500 dropped 0.2 per cent to 2,358.84, while the tech-rich Nasdaq Composite Index fell 0.3 per cent to 5,894.68. Nissan was once again led by the Rogue small SUV, which set a March sales record of almost 40,000 vehicles for a 20 percent increase.

The Canadian arm of General Motors led auto sales in Canada for the month of March, and also posted the biggest surge in monthly sales. Truck sales rose 0.5 percent. At Buick, the automaker said crossovers are expected to account for more than 75% of retail deliveries in 2017, up from 66% in 2016.

GM, which sold 256,224 new cars and trucks in March, was the only domestic automaker to report a gain. Nissan reported a gain of just over 3 percent. The shares were sold at an average price of $35.38, for a total transaction of $48,789.02.

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Yet even at Ford, which saw a 24 per cent decline in vehicle sales, executives were happy with monthly numbers largely because of a 10 per cent increase in sales of the F-Series pickup. Fleet sales, which accounted for 23 percent of the total sales, fell 15 percent, and retail sales slid 1 percent and contributed 77 percent to total sales.

Deliveries slumped 7.2 percent at Ford and 4.6 percent at Fiat Chrysler last month.

The company also provided its chief executive with a "strategic incentive" grant in 2016 valued at $2.5 million.

Ford's USA vehicle sales tumbled 24.2%, while SUV sales dipped 3.4% and truck sales climbed 2.5%.

Indeed, both General Motors Co and Fiat Chrysler Automobiles NV shares fell almost 4 percent. Through March, the Honda Civic and Ford F-150 led Canadian auto and truck sales, while the Nissan Rogue was Canada's best-selling SUV. The Motley Fool owns shares of and recommends Ford.

Ford's stock price is down 2.19% at $11.39 and GM's stock price is lower by 3.25% at $34.21 as of 10:05 AM EST. Tesla also isn't far behind another Big Three company: General Motors has a market cap of $51.11 billion.

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