This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Ford and GM Shares Rise as Automakers Top Estimates

DETROIT ( TheStreet) -- Shares of both Ford (Ford) and GM (GM - Get Report)were rising in premarket trading Wednesday after both automakers beat third-quarter earnings estimates.

Before Wednesday's opening bell, Ford shares were trading at $10.77, up 41 cents, or about 4%, while GM shares were trading at $24.41, up $1.12, or about 5%.

Ford, which reported on Tuesday, earned 41 cents a share. Analysts surveyed by Thomson Reuters had estimated 30 cents. GM, which reported Wednesday, earned 93 cents a share, excluding items. Analysts had estimated 60 cents.

Both companies reported strong North America earnings but said 2012 losses in Europe will exceed $1 billion. However, Ford announced a major restructuring effort on Thursday, Oct. 25. In its earnings release on Tuesday, GM said it estimates its earnings before interest and tax in the region will be between negative $1.5 billion and negative $1.8 billion, "depending on the level of restructuring activity in the fourth quarter."

GM said it is "targeting full-year 2013 EBIT-adjusted for GM Europe to be slightly better than 2012. Break-even EBIT-adjusted results are targeted by mid-decade."

In a report on Ford issued Wednesday and titled "We've Seen This One Before -- It Has a Great Ending," Jefferies analyst Peter Nesvold said Ford's "margins in North America keep setting all-time bests on normalized-type volumes, a tribute to arguably the auto industry's most successful restructuring on record." Ford reported a pretax margin of 12% in North America in the third quarter.

"Now the company's focus has turned to Europe," Nesvold wrote. "You've seen what they've done before. So why don't you own the stock?" He has a buy on Ford and a $14 price target.

Writing on GM on Wednesday morning, Nesvold said, "Similar to Ford, North America drove much of the strength while Europe was within a penny of expectations. However, (Asia) also contributed meaningfully to the beat (a surprise given strikes in Korea). While GM cannot present a (Europe) restructuring plan publicly just yet, it is at least trying to frame the magnitude of the losses."

Regarding Europe, Nesvold held out hope for the entire automotive industry, writing that "Europe's automotive industry has a dreadful market structure. After years of kicking the can down the road, the industry's time of reckoning surely seems to be near."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
F $13.56 0.00%
GM $31.80 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs