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November Auto Sales Roundup

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November auto sales were strong across the board, with the SAAR expected to be around 15.2 million units. Let’s take a look at performance on an individual company basis. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) healthily exceeded its consensus sales growth forecast of 3.5% unit growth, with sales expanding 6.5% during November and retail sales growing 12%. Total small car units surged 76% year-over-year, making it Ford’s best November small car performance in 12 years. Utilities and trucks units lagged cars, growing 2% and 3.7%, respectively, compared to 15.2% growth in total car sales. Although performance was boosted due to sales being pulled into November as a result of Sandy, we thought the results were good, … Read more

Toyota’s North American Success Translates to a Strong Second Quarter

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Global automaker Toyota (click ticker for report: ) reported strong second quarter results Monday morning. Revenues surged 18% year-over-year to ¥5.4 trillion, relatively strong given the considerable weakness in sales to China during September and October. Operating income increased over three-fold to a better-than-expected ¥257.9 billion. The company lapped smaller numbers in the second quarter due to weakness in the supply chain during the first half of fiscal year 2012. Still, Toyota continues to sell more products and outpace competitors, particularly in North America. Operating income in the region jumped 350% year-over-year. Europe remains a smaller portion of the overall business mix than Japan and North America, but we think the company is well positioned to gain market share as … Read more

October Auto Sales Were a Tad Light; We’re Not Worried

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After Ford (click ticker for report: ) and General Motors (click ticker for report: ) posted fantastic third quarter results, industry-wide auto sales came in slightly lighter than expected in October, as many cite Hurricane Sandy as hurting industry-wide unit sales by as many as 300,000 units. Let’s take a look at a few companies. Ford Best Ideas Newsletter holding Ford announced an excellent quarter on Tuesday, and shares have rallied since trading resumed Wednesday. The firm’s October results were decent, with sales growing 0.4% year-over-year (retail up 2%), but they came in below consensus estimates of 3.5% expansion. More pressing, Alan Mulally confirmed that he will remain CEO until “at least” 2014, but President Mark Fields was promoted to … Read more

General Motors Reports A Fantastic Third Quarter

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American automaker General Motors (click ticker for report: ) reported fantastic third quarter results Wednesday morning. The firm shrugged off European weakness to grow revenue 2.5% year-over-year to $37.6 billion, nearly $2 billion better than consensus estimates, even though it was negatively impacted by $1 billion of currency fluctuations. Earnings were also much better than expected, falling 9% year-over-year to $0.93—about $0.28 higher than consensus expectations. EBIT (earnings before interest and taxes) actually ticked up $100 million to $2.3 billion, so if it wasn’t for higher tax rates, earnings would have been comparable to last year. Though revenue in North America grew 7% year-over-year to $23.3 billion, EBIT in the region tumbled 17% to $1.7 billion. Operating margins fell substantially, … Read more

TRW Rides Auto Recovery to Solid Results

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Auto safety systems manufacturer TRW Automotive (click ticker for report: ) reported solid third quarter earnings Tuesday morning, echoing what we’ve heard from Ford (click ticker for report: ). Revenue increased 1% (9% ex-currency/divestitures) to $4 billion, a bit stronger than consensus estimates. Net earnings decreased 9% year-over-year to $1.24 per share, which was still slightly better than consensus expectations. Gross margins increased about 70 basis points year-over-year to 10.4% as OEMs continue increased investment in safety devices. SG&A also declined about 20 basis points year-over-year to 3.7%, though the figure was roughly flat on an absolute basis. As a result, operating margins increased 50 basis points to 6.6%. Free cash flow remained solid, as the firm generated $31 million … Read more

Ford Smashes Expectations, Operating Margin Expansion Drives Earnings

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American automaker Ford (click ticker for report: ) reported fantastic third quarter earnings Tuesday morning in spite of persistent weakness in Europe. Revenue fell 3% year-over-year to $32.1 billion, which was still much higher than consensus estimates. Operating profit, which excludes special items, surged 18% year-over-year to $0.40 per share, 25% higher than consensus estimates. The real story at work during the third quarter was the undeniable success of One Ford in driving operating margin expansion. While revenue in North America increased 8% year-over-year to $19.5 billion, operating margins expanded a whopping 340 basis points to 12%. As a result, pre-tax operating profit surged 50% year-over-year to $2.3 billion. Our main thesis behind the company is that operating leverage is … Read more