Honda (NYSE: HMC) closed at $22.40 Thursday. HMC overall option implied volatility of 92 is above its 26-week average of 42 according to Track Data, suggesting larger price movement.
Toyota Motor (NYSE: TM) closed at 67.09 Thursday. TM overall option implied volatility of 70 is above its 26-week average of 39 according to Track Data, suggesting larger price movement.
Tata Motors (NYSE: TTM), an Indian car manufacturer, closed at $4.50 Thursday. TTM overall option implied volatility of 84 is above its 26-week average of 61 according to Track Data, suggesting larger price movement.
Nissan (NSADQ: NSANY) closed at $8.57 Thursday. NSANY overall option implied volatility of 76 is above its 26-week average of 49 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
This is part of a weekly series about the auto industry. Record-high oil prices and a global slowdown have contributed to a crisis in the sector, and this column will highlight some of the interesting stories that emerge as that crisis plays out.
Monthly sales figures for the auto industry are enough to make a grown man cry -- especially if that man works for an American car company.
General Motors (NYSE: GM) saw sales fall a whopping 45% in October compared to October 2007. Potential GM partner Chrysler fell 35%, while Ford (NYSE: F) dropped 30%.
Auto sales were down 32% for all manufacturers. If the current sales rate continues, the industry will sell about 10 million fewer cars this year.
There are a number of interesting details in this month's report. For one thing, it looks like GM is in even worse shape than previously thought. Analysts have frequently stated that GM is burning about $1 billion a month, giving it less than a year until it faces a cash crunch crisis. But the astounding drop in sales at GM suggest that the cash crunch might hit sooner than that -- GM may have just a few months before bankruptcy becomes a very real possibility.
Another interesting detail: the SUV love affair is officially dead. Sales of Chevy Suburbans are down 70% year-over year, Tahoes down 77% and Yukons down 76%. And this despite the fact that gas prices fell dramatically during October.
Nissan Motors (NASDAQ: NSANY) will unveil a stripped-down version of its Versa subcompact vehicle this month at the lowest price ever for a brand-new car in the U.S. market. The new Versa won't come with power windows or air conditioning, but will retail at $9,990 -- just a few bills below ten grand. The cheapest new vehicle currently being sold in the U.S. is the Hyundai Accent.
Nissan's valiant attempt here is geared towards converting used-car buyers into new-car buyers. It's true that a car shopper can buy a decent used vehicle for $10k that will most likely have air conditioning and more interior space (and more engine power). The Mexican-made Versa will go on sale November 18 and will be priced $3,000 less than any currently sold Versa in the U.S.
Alexander Edwards with Strategic Vision asks the question I'm thinking: "Automakers seem to be trying to do two things: bring in vehicles in the lowest price range while also trying to deliver cars with some level of nobility and class and extras ... the question is, how many people are going to choose a vehicle that doesn't have air conditioning?"
That one single feature could be killer to Nissan's attempt here. Folks will buy cars with a complete lack of features -- except air conditioning. But will shoppers look at used cars with more size and convenience, or a brand new car without any features which will depreciate considerably the moment it's driven off the dealer lot? In the good news segment, the $10,000 Versa will see a fuel efficiency figure of 34 miles per gallon on the highway.
U.S. stock futures fell Friday morning, after two days of gains and ahead of some economic data that will likely show further economic distress. The economic releases are: the employment cost index for q3, personal income and spending for September, the Chicago manufacturing PMI and the University of Michigan's consumer confidence for October. Global stocks generally declined Friday as oil again dropped below $65 a barrel to around $63.50. Meanwhile, the Bank of Japan cut its benchmark interest rate to 0.3%, which was less than expected, causing the Nikkei to drop by 5%.
Chevron (NYSE: CVX) is due to report this morning, following Exxon Mobil's (NYSE: XOM) record profit reported Thursday.
Burger King (NYSE: BKC) reported first quarter earnings of 38 cents per share, ex-items, below the consensus of 39 cents. Revenues came in at $674 million, versus the consensus of $667.6 million.
Electronic Arts (NASDAQ: ERTS) shares dropping 14% in after-hours trading after it posted a wider loss and reduced its annual forecast. The game maker also announced layoffs.
Sun Microsystems Inc. (NASDAQ: JAVA) on Thursday reported a $1.68 billion fiscal first-quarter loss due to charges, but sales also fell more than 7% from a year ago. In all, ex-items, the company would have lost $65 million, or 9 cents a share on revenue of $2.99 billion for the quarter. Shares were down 3% in after-hours.
This is part of a weekly series about the car business. The auto industry plays an important role in the global economy, and record-high oil prices and a global slowdown have contributed to a crisis in the sector. This column will highlight some of the interesting stories that emerge as that crisis plays out.
And I thought things looked bad last week (Car Biz: Dark days in Detroit and beyond). The skies do indeed look dark in Detroit and the auto industry as a whole. But now instead of weak sales and slow growth, we are looking at plummeting sales and the very real possibility of bankruptcy and further consolidation throughout the industry.
Yesterday, as Zac Bissonnette noted, General Motors (NYSE: GM) dropped like a stone to a 58-year low. This earlier low point came before the Korean War, when gas cost less than 30 cents a gallon. Looking back, of course, we can see that GM had some great years ahead of it. If only the future looked so bright now.
Today, an S&P analyst quoted on Bloomberg said that the Big Three could face bankruptcy as macroeconomic factors "overwhelm them." This follows yesterday's comment from S&P that debt from GM and Ford Motor Company (NYSE: F) may have to be downgraded again, even deeper into junk status.
GM has replied to S&P's comments, saying that while it does indeed face "unprecedented challenges," it does not consider bankruptcy an option at this time. But then again, what else are they going to say?
U.S. stock futures drifted lower Thursday morning on the heel of another big loss reported by AIG. With reports today that mortgages made in 2007 are going bad at a rapid pace, the blow to the financial system may be even deeper than Wall Street had estimated, and data on June pending home sales could give more information about the recent state of the housing market. Also in focus today will be July same-store sales announced by retailers, which could show a 2.2% gain due to stimulus checks and back-to-school shopping, as well as rate decisions by ECB and BOE. The latter already kept rates the same. Finally, rising oil prices could affect trading as well.
AIG (NYSE: AIG) posted its third straight quarterly loss Wednesday after the close. Analyst believe that this quarter's $5.56 billion recorded loss due to investments related to mortgages could continue in the next few quarters. AIG's results didn't just cause investors to dump the stock, but also caused overall jitters about financials. AIG shares are down over 9% in premarket trading. In Europe, Allianz, Axa, Aegon, three of the biggest insurers, also post lower earnings on asset writedowns. Toyota Motor Corp. (NYSE: TM) reported a 28% profit fall in the quarter, 39% drop in operating profit. The company said the strong yen and rising costs of materials for the decline in addition to soft conditions in the U.S. all contributed to these results. While it said it plans to offset the declines by launching new vehicle models and stepping up production of popular models, it's unclear how successful that would be in light of softening economic conditions worldwide.
Staying with the auto industry, The Wall Street Journalreported that Chrysler and Nissan Motors (NASDAQ: NSANY) are in talks tabout jointly producing midsize cars, where Nissan would produce midsize sedans that Chrysler would sell in the U.S. under its own name.
Although Ford Motor Co. (NYSE: F) has fallen on hard times -- like much of the auto industry -- the company will eventually come back around. Its success, like that of competitor General Motors Corp. (NYSE: GM), will be on its ability to be flexible enough to build the vehicles customers want as needs change.
That's a large order, though. Ford CEO Alan Mulally recently stated that his Way Forward plan was behind schedule, and the automaker wasn't expected to post an annual profit until 2010. Ford knows it needs to be more globally flexible or it won't even make that extended target. Profit centers like SUVs are so 1999.
On top of all that, a Volkswagen (OTC: VLKAY) executive recently said that the German automaker intends to surpass Ford to become the third-largest seller of vehicles in the world. That's quite a bold prediction and it puts Ford under even more pressure to get automobiles delivered to customers with increasing manufacturing and selling flexibility. As of last year, Volkswagen sold 6.19 million vehicles to Ford's 8.55 million. Is one year enough of a background to declare VW a future winner over Ford? Possibly.
Then again, Japanese automakers Honda Motor Corp. (NYSE: HMC) and Nissan Motor Co. (NASDAQ: NSANY) are not going anywhere and will continue to put up a great fight. Toyota Motor Co. (NYSE: TM) is currently the king of the Japanese automakers, right behind GM globally. If Volkswagen really believes it can charge into the third spot, it better have the global vehicle finesse to know what its regions' customers want before they want it -- and then, make those sales.
Nissan Motors (NASDAQ: NSANY) thinks that the US market will account for less than 15 million vehicles sales this year. Last year that figure was 16.1 million. The Japanese company says it is preparing for the worst. That is too bad, because Nissan tends to sell smaller, more fuel-efficient cars and not large pick-ups and SUVs. If it thinks the market for its products will get much softer, its says something about the entire industry.
According to Reuters, Nissan's CEO, Carlos Ghosn, said: "If we take the trend of the market in May and June it looks like we are going to be much below 15 million. Now I'm not sure if this is going to continue for the rest of year. We are preparing ourselves for the worst."
If a typical car sold in the US costs the consumer $25,000, Nissan's prediction indicates that total sales in the world's largest vehicle market will fall off by about $30 billion. That is nearly one quarter of Ford's (NYSE: F) annual sales.
Having a lot of small cars in the line-up has turned out to be a massive blessing for Japanese car companies. Honda (NYSE: HMC) and Nissan (NASDAQ: NSANY) did well in May US car sales. They have very few huge SUVs and pick-ups in their model lines. By contrast, Detroit's big auto companies have had their sales bolted to the sales of trucks. Consequently, their sales were murdered in May.
Honda's shares moved up a remarkable 8.6% overnight in Tokyo, a reward for being in the right place at the right time. But, that underestimates what Honda has done by sticking to selling small cars in America during the years when pick-ups were doing so well. Other Japanese car companies benefited, but to a lesser extent. Shares in Nissan rose 5.3% and Toyota (NYSE: TM) was up 3.2%. Honda and Nissan were the only major car companies that had sales increases in the US for May.
The news is more than a changing of the guard from Detroit to Japan. That has been going on for more than a decade. It is also a sign that Honda and Nissan are beginning to best Toyota, their larger rival, because their models mixes are more suited to a $4-per-gallon gas environment.
Toyota has been the major threat to US car companies. That may be changing.
Douglas A. McIntyre is an editor at 247wallst.com.
Nissan Motor Corp. (NASDAQ: NSANY), Japan's third-largest automaker, announced this morning higher fourth quarter profit, but forecast a decline in profit for the current year, blaming an unfavorable rising yen and soaring material costs.
Nissan Motor announced that its profit during the quarter jumped 67% to 137.6 billion yen ($1.3 billion). And its income figures were definitely something to cheer about. During its fourth quarter last year, the company had a profit of 82.2 billion yen. Excluding one-time "fifth-quarter" numbers, the company's earnings figures would have showed a surge of 95%.
Despite the positive results, the automaker isn't optimistic about its future earnings and issued a gloomy outlook. The company expects net income for the current year to drop 30% to 340 billion yen ($3.3 billion), which is below the 368 billion yen that analysts at Factset Research predicted. Nissan cited unfavorable currency exchange, higher commodity and energy prices, and increased material expenses.
It's not like it was a surprise, and yet the magnitude of it still managed to astonish me somewhat. Yes, I'm talking about the abysmal March car sales automakers reported Tuesday. Wait, wasn't it April's Fool's? Was it just a hoax? I wish, but this was no joke, only another sign of the condition of the U.S. economy. Consumers, burdened by record high gasoline prices, a housing correction not seen in many years, a credit crunch and food inflation, decided big ticket items should not be on their shopping list.
In numbers, General Motors Corp. (NYSE: GM) reported a 19% drop in U.S. sales during March, Ford Motor Co. (NYSE: F) reported a 14% decline, Chrysler - a 19% decrease, and even Toyota Motor Co. (NYSE: TM) said sales were down 10% compared with a year ago sales. Nissan Motor Co. Ltd. (NASDAQ: NSANY) sales fell 4% and Honda Motor Co. (NYSE: HMC)'s 3%. Porsche -- much like Ford's recently sold luxury brands -- had a bad month with a 25% drop in sales, while BMW 's sales were down 5.4%.
Now, automakers warned things could get even worse in the near term, which should make investors worried, especially those holding shares of Ford and GM. The already struggling American companies, already losing money in North America, stand to feel the revenue loss, and being in the midst of massive restructuring, that could hurt their ability to weather the storm.
There is never a shortage of jobs. Some people have two or three jobs. The classified adds have thousands of jobs all the time -- always. If someone is unemployed there is a reason and it is definitely not a lack of jobs.
Sometimes it is a regional lack of jobs, General Motors (NYSE: GM) and Ford Motor (NYSE: F) in the rust belt states of Michigan and Ohio have downsized, but foreign manufacturers Toyota (NYSE: TM) and Nissan Motors (NASDAQ:NSANY) in the Southeast have up sized. This does not help the states where jobs are leaving, and indeed causes other massive problems like weakening the tax base and pushing housing and other elements of the local economy down. However, from a national unemployment standpoint that does not count.
In our discussions of unemployment and the economic picture we attempt to understand the government figures and attribute some meaning. We know the government is prone to put things in their best light (lie) sometimes and there is discussion about what a true measure would be, but does that really matter? It is more important that whatever criteria is used remain constant so that we can use the data for comparisons, not that it be altered often as people become concerned about the exactness of the figures.
It might be time we need to account for a new set of metrics. What are the costs of retraining? How could these costs be distributed without expanding government -- not something I would support. We know that some people are not employable or are only marginally employable because they simply do not have the capability to do many jobs. I have numerous jobs, although generally speaking, I have created them myself over time. Clearly education and training are a factor, along with over all aptitude.
Despite a troubled U.S. economy, a stronger yen and increased credit costs in the US., it looks like Japanese automakers are still benefiting from a booming car demand. After Honda Motor Ltd. (NYSE: HMC) announced early this week its profit rose 38.1% in the third-quarter, now it is Nissan Motor Co. (NASDAQ: NSANY)'s turn to prove its efficiency.
Japan's second-biggest automaker reported this morning its third-quarter profit rose 26.6% to 132.22 billion yen ($1.24 billion), helped by higher sales in Asia. The company had posted a profit of 104.46 billion yen during the same period of last year. The company's results also show a respectable 18.2% jump in revenue to 2.770 trillion yen ($26.03 billion), following strong sales of the Rogue crossover vehicle in the U.S.
Although Nissan's earnings numbers matched analysts' predictions, the company is still showing some concerns over its further gains. The automaker stated that its bottom line could be affected by lower American consumer spending. A weaker dollar also could dampen Nissan's earnings by reducing the value of its foreign revenue.
MOST NOTEWORTHY: Syntroleum, Pervasive Software and Ardea Biosciences were today's noteworthy initiations:
Merrriman believes Syntroleum (NASDAQ: SYNM) possesses the technological platforms with its Biofining process and the cost structures with its Tyson Foods (NYSE: TSN) relationship needed to commercialize clean synthetic fuels. The firm started shares with a Buy rating.
Pervasive Software (NASDAQ: PVSW) was assumed with a Buy rating and $7 target at B. Riley, as they find shares attractive in this market given the company's solid balance sheet with a sizeable cash balance and positive operating cash flow. They believe the stock is undervalued at current levels.
Ardea Biosciences (NASDAQ: RDEA) was assumed with an Outperform rating at Cowen. The firm believes Ardea has a promising clinical pipeline for HIV, gout, and cancer.
Honda (NYSE: HMC) closed at $22.40 Thursday. HMC overall option implied volatility of 92 is above its 26-week average of 42 according to Track Data, suggesting larger price movement.
Monthly 
U.S. stock futures fell Friday morning, after two days of gains and ahead of some economic data that will likely show further economic distress. The economic releases are: the employment cost index for q3, personal income and spending for September, the Chicago manufacturing PMI and the University of Michigan's consumer confidence for October. Global stocks generally declined Friday as oil again dropped below $65 a barrel to around $63.50. Meanwhile, the Bank of Japan cut its benchmark interest rate to 0.3%, which was less than expected, causing the Nikkei to drop by 5%.
Although 
It's not like it was 
There is never a shortage of jobs. Some people have two or three jobs. The classified adds have thousands of jobs all the time -- always. If someone is unemployed there is a reason and it is definitely not a lack of jobs.
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