NEW YORK (TheStreet) -- Shares of Ford (F) - Get Ford Motor Company Report declined 1.25% to $13.86 in afternoon trading Wednesday after the U.S. auto maker recalled 204,448 Edge and Lincoln MKX crossover models in the U.S. and Canada to resolve a corrosion problem in some brackets near the fuel tank that could cause gas leaks and possibly fires.
The recall includes some 2007-2008 Ford Edge and Lincoln MKX vehicles, the company said. The recall only affects vehicles sold in 21 states in the East and Midwest.
The problem deals with reinforcement brackets at the point where the fuel tank connects to the rest of the vehicle. Corrosion at this juncture could cause a fuel leak that could spark a fire if the vehicle touches an ignition source. Vehicle owners would likely smell the leaking gasoline, see the leak or see the check engine light on the dashboard.
Ford said Wednesday it knows of just one fire caused by this corrosion problem and no accidents or injuries have occurred as a result.
The recall includes vehicles built at the company's assembly plant in Oakville, MI from June 15, 2006 to September 22, 2008. Of the vehicles that fit the criteria, 186,024 are in the U.S. and 18,424 are in Canada.
The recall affects vehicles originally sold or currently registered in the following states and the District of Columbia: Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, and Wisconsin.
Separately, TheStreet Ratings team rates FORD MOTOR CO as a "buy" with a ratings score of B. Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.9%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- FORD MOTOR CO's earnings per share declined by 32.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, FORD MOTOR CO increased its bottom line by earning $1.75 versus $1.42 in the prior year. For the next year, the market is expecting a contraction of 36.6% in earnings ($1.11 versus $1.75).
- The share price of FORD MOTOR CO has not done very well: it is down 22.41% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Automobiles industry. The net income has significantly decreased by 34.4% when compared to the same quarter one year ago, falling from $1,272.00 million to $835.00 million.
- You can view the full analysis from the report here: F Ratings Report