April 23 (Bloomberg) -- Ford Motor Co., the only major U.S. automaker surviving without federal aid, has more than doubled in the past seven weeks even as it prepares to announce its largest first-quarter loss in 17 years.
The company may say tomorrow it lost $3.2 billion, or $1.33 a share, the average estimate of four analysts surveyed by Bloomberg about the quarter. Investors pushed Ford up to $4.49 today in New York Stock Exchange composite trading from $1.87 on March 4 on expectations it will be a strong survivor when the U.S. industry emerges from the worst sales in 27 years.
“Ford is a completely different animal” than General Motors Corp. and Chrysler LLC, said Jeffrey Spotts, a New York- based portfolio manager at the $250 million Prophecy Fund which has been accumulating Ford shares since February. “Consumers don’t want to buy a car from a company that took money from the government or that might go bankrupt.”
The Dearborn, Michigan-based company benefits from growing sentiment on Wall Street that it will seek neither a bailout nor bankruptcy protection. Ford’s cost reductions will let it avoid federal aid in a U.S. market that remains at an annual sales rate of about 9 million vehicles, a pace not seen since 1981, Ford Chief Financial Officer Lewis Booth said last month.
A Ford spokesman, Bill Collins, declined to comment on first-quarter results.
GM Chief Executive Officer Fritz Henderson said on April 17 the largest U.S. carmaker will seek bankruptcy protection unless it can restructure debt out of court by June 1. GM is operating on $13.4 billion in federal loans.
Positive Reports
Chrysler, operating on $4 billion in government aid, has until May 1 to form an alliance with Italy’s Fiat SpA or it will be cut off from further federal assistance. Without that support, the third-largest U.S. automaker, will likely be liquidated in bankruptcy, CEO Bob Nardelli has said.
Analysts have issued positive reports on Ford since meeting with Booth, including a buy recommendation on April 21 from Goldman Sachs. They cited a March 9 agreement with the United Auto Workers union that slashed Ford’s annual labor costs by $500 million and a debt restructuring completed April 3 that cut borrowings 38 percent.
“Unlike GM, we do not foresee bankruptcy at Ford, which we believe has sufficient liquidity to make it through to 2010 without additional funding,” Goldman analyst Patrick Archambault wrote. “With GM and Chrysler likely to file for bankruptcy in coming weeks, in our view, we think the stage is set for a sea change in the structure of the U.S. auto industry.”
Executive Chairman Bill Ford, great-grandson of company founder Henry Ford, acknowledged that risk at a conference in California on April 20. He said his company is intent on remaining self-sufficient.
“I kind of like where we are, even if ultimately there are some disadvantages,” Ford said. “The advantage of being an independent company, able to react quickly and chart your own future -- there’s great benefit to that.”
No comments:
Post a Comment