Ford bounces after October sales -- why?

Douglas McIntyre — Thu, 02 Nov 2006 09:51:00 EST

The market applauded Ford Motor Company's (NYSE:F) October sales numbers so loudly that investors must have thought that Pavoratti had taken the stage for one last performance. Ford's stock rose 3% to $8.52 on the news that its U.S. car sales rose 22% from October of last year. In the small print, it said that last October was abysmal because it fell after a period of huge incentives that drove summer 2005 unit sales up. Truck sales were flat, and that is where Ford's most profitable vehicles, like its F-Series pick-up are.

Even with its October numbers, Ford has offered no evidence (subscription required) that the company is not still in a long, dark tunnel. According to the Wall Street Journal: "At Ford, October vehicle sales jumped 8% from a year earlier but were off 9.6% from September."

Inventory problems (subscription required) will make production cuts necessary for the first half of 2007.

In addition, cash is starting to become an issue at Ford in the minds of some. The company went through $3.1 billion in Q3 and is forecast to eat another $3.6 billion in Q4. That takes into account unit sales at a rate the company showed in October. Ford has over $23 billion in the bank, but another year like 2006 would leave the company very close to the edge.

Ford has come up quite a bit from its 52-week low of $6.06 but it is hard to figure out why.

Douglas McIntyre is a partner at 24/7 Wall St.

Ford bounces after October sales -- why? originally appeared on BloggingStocks on Thu, 02 Nov 2006 09:51:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Why Wal-Mart is losing to Target

Sarah Gilbert — Mon, 30 Oct 2006 14:23:00 EST

Filed under: Bad News, Rants and Raves, Competitive Strategy, Wal-Mart (WMT), Target Corp. (TGT)

For many investors, putting money in Wal-Mart Stores, Inc. (NYSE:WMT) is like investing in America. Wal-Mart stands for everything that your stereotypical middle American does; sprawling properties, gigantic packages of Suave(TM) and Snickers(TM) and Snoop Dogg (TM, probably). Wal-Mart is to retail what the Hummer is to automobiles. Big, resource-hungry, and not entirely respectful of the little guy. And along with America, Wal-Mart seemed like the never-ending growth story. Sometimes I thought the Waltons' place in the billionaires' top 10 would never be equalled.

But some days, like today, the news seems to go a different way. Wal-Mart, emperor of homogenization, king of the price cut, sultan of squashing its competitors, posted a teensy 0.5% same-store sales growth in October. There's talk that the retailer might even (yikes! double yikes!) post so-called "negative growth" a.k.a. shrinking in the months to come.

Where Wall Street comes from, negative growth is a synonym for "run for the hills." From whence cometh our help, Americans?

In my opinion, our help cometh from Target Corp. (NYSE:TGT).

Continue reading Why Wal-Mart is losing to Target

Why Wal-Mart is losing to Target originally appeared on BloggingStocks on Mon, 30 Oct 2006 14:23:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments