AutoIndustry posts
FeedPosted Mar 3rd 2010 9:00AM by Steven Mallas (RSS feed)
Filed under: Earnings Reports, AutoZone Inc (AZO)
AutoZone (AZO), a distributor of replacement items for motorized vehicles, posted a very good second quarter on Tuesday. Net sales increased 4%, and earnings per diluted share went into high gear, rising over 21% to $2.46. According to our earnings preview, the analysts were expecting only $2.34 per share.
Gross margin experienced an expansion, as did the return on invested capital metric (the latter being measured over the trailing four quarters). Both of these developments indicate that execs are skillfully managing the underlying fundamentals of the business. Domestic same-store sales didn't rise as robustly as they did back during the first quarter, moving up only 1%. I would have liked to have seen a better stat on that one, but overall, I'm not going to complain too much, unless I detect a weakening trend in coming months.
Continue reading AutoZone's Q2: Is the Stock's Fuel Tank Still Full?
Posted Jan 7th 2010 6:00PM by Joseph Lazzaro (RSS feed)
Filed under: Japan

Japan's new Finance Minister Naoto Kan is on record saying he wants to see a weaker yen, CNNMoney.com
reported Thursday.
And, as they say in the foreign exchange, 'easier said than done.' The yen has risen to a level versus the dollar that's a concern to Japan's auto makers. Although the yen is roughly unchanged versus the dollar since January 2009, it's strengthened about 15% versus the dollar since the onset of the global financial crisis' acute stage in August/September 2008.
The significance? Japan's automakers must raise prices on cars/vehicles exported to the U.S. to protect profit margins of vehicles priced in dollars: if they don't those margins will shrink.
Continue reading Japan's New Finance Minister Wants a Stronger Dollar, Weaker Yen
Posted Dec 10th 2009 9:00AM by Tom Johansmeyer (RSS feed)
Filed under: JPMorgan Chase (JPM), Bank of America (BAC), Amer Intl Group (AIG)
The bailouts of late 2008 and 2009 have cost the American taxpayers $61 billion, according to the Treasury Department, but the banks aren't to blame this time. The auto manufacturer bailout, which includes Chrysler and General Motors (GRM), has cost the country more than $30 billion, with American International Group (AIG) consuming another $30 billion.
Meanwhile, Bank of America (BAC) has already made good with the government, and several banks -- such as Capital One (COF), JP Morgan Chase (JPM) and TCF Financial (TCB) -- only have to clean up situations regarding the warrants they've issued. And interestingly, the losses from the bailouts on AIG and auto manufacturers are being offset by profits from the bank bailouts, which could generate additional funds of up to $19.5 billion.
Continue reading Banks subsidizing auto TARP, extra money could be spent
Posted Aug 25th 2009 3:00PM by Zac Bissonnette (RSS feed)
Filed under: Industry, General Motors (GM)

Now that Cash For Clunkers is over, the auto industry has a problem: Where will car sales come from now?
Everyone who had an old car and wanted a new one took advantage of the Cash For Clunkers plan -- who is going to go buy a new car the day after the government stopped paying people $4,500 to buy cars?
J.D. Power and Associates reduced its 2010 sales forecast to 11.5 million units from 11.6 million -- citing the impact of Cash For Clunkers. In other words, a big part of what Cash For Clunkers did was borrow sales from the future and front-load them, and now there's nowhere to go for car sales now.
Continue reading With Cash for Clunkers gone, where does the auto industry go now?
Posted Jul 29th 2009 3:40PM by Zac Bissonnette (RSS feed)
Back in August of 2008, General Motors pulled out of car leasing altogether, citing slumping demand, declining resale values, and financing problems. Now the company, in partnership with GMAC, is planning to reenter the leasing market on August 1st of this year.
The Wall Street Journal reports that the final plan is still being worked out, but the Cadillac CTS, "which competes in a luxury market that is heavily dependent on the availability of lease deals," is likely to be among the models included in the leasing line-up.
Continue reading General Motors goes back to car leasing: A sad day for consumers
Posted Jun 18th 2009 10:10AM by Mark Fightmaster (RSS feed)
Filed under: Analyst Reports, Analyst Upgrades and Downgrades

This morning, Goldman Sachs felt it prudent to up its view of the
U.S. auto sector to Attractive from Neutral. The brokerage stated that it would use any current weakness as an opportunity to build positions. If, like me, you are questioning Goldman's strategy, the firm explained, "Despite the significant rally in auto shares since the February lows, we think we are still in the middle phase of a cyclical rebound in the auto sector."
In its note to clients, Goldman Sachs predicted, "improved affordability, improving confidence and significant pent-up demand as likely to offset the impact from gas prices and deliver significantly more upside in the space as auto sales gain momentum."
Continue reading Surprisingly, Goldman Sachs raised the auto sector to Attractive
Posted Jun 11th 2009 3:30PM by Zac Bissonnette (RSS feed)
Filed under: General Motors (GM)

The average American family of four has, against its will, invested over $900 in the Detroit auto industry so it's fair to ask: Will we be getting our money back?
President Obama's auto task force told lawmakers yesterday that there is a "reasonable probability" that the federal government will be paid back. I don't buy that and here's why:
Liquidation analysis of GM suggests that there would be just $10 billion in net proceeds from a liquidation. Given that the government has $80 billion invested in the industry with little collateral, long-time money losers like GM and Chrysler will need to earn spectacular returns on equity to pay back their loans. I just don't see it happening. Do you?
Continue reading Obama says 'reasonable probability' of getting paid back on auto loans
Posted May 26th 2009 5:00PM by Michael Fowlkes (RSS feed)
Filed under: Forecasts, Bad News, Consumer Experience, Employees, Market Matters, Money and Finance Today, Economic Data, Housing, Recession, Financial Crisis

The employment data is in for April, and it is not a pretty picture, as all but 6 states in the country saw
increases in the number of jobless claims.
We all hope that Federal Reserve Chairman Ben Bernanke is right, and the economy is going to start to turn around in the latter part of this year, but even the most optimistic forecasters agree that unemployment is going to continue to rise, possibly above 10% before the worst is over.
Continue reading Unemployment continues its rise in April
Posted Apr 15th 2009 8:40AM by Mark Fightmaster (RSS feed)
Filed under: Deals, Bad News

Reports have surfaced in London that Italian automaker Fiat is
ready to walk away from the Chrysler deal. The bone of contention is high labor costs. The Italian firm has given the U.S. auto firm and Canadian and American labor unions until the end of the month to "significantly reduce labor costs." This revelation was made in an interview of Fiat's CEO Sergio Marchionne in the Canadian newspaper the
Globe and Mail. Fiat wants Chrysler to lower the labor costs to Japanese and German plants levels.
The problem facing Chrysler is that the deal with Fiat is its last chance to stay out of bankruptcy. With Fiat ready to walk away from the deal, the North American unions had better agree to the demands or face some job losses. Let's not forget that Chrysler was given 30 days to complete the merger with Fiat or the American firm would be cut off from the government funding it is currently existing on.
Continue reading Will labor costs kill the Chrysler-Fiat partnership?
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