July Auto Sales Continue Blistering Pace as Ford, GM, Chrysler Gain

Detroit (TheStreet) -- U.S. auto sales continued to set a blistering pace in July, as Chrysler (FIATY) sales rose 20%. Ford (F) said sales gained 10% and GM (GM) sales gained 9%.

Chrysler had its best July since 2005, Ford had its best July since 2006 and GM had its best July since 2007. Chrysler said it internally projects the seasonally adjusted annual rate for U.S. light vehicle sales to be 16.8 million units, while GM projects the SAAR at 16.7 million. Nissan (NSANY) sales gained 11%.

GM said it delivered 256,160 vehicles in July. Retail sales gained 4%. Sales of crossovers and trucks, which include pickups, vans and SUVs, surged by double-digits.

"Sales of utility vehicles soared in July because American families feel better about the economy than they have in a long time, and they are finding an incredible variety of redesigned and all-new models in our showrooms," said Kurt McNeil, U.S. vice president of sales operations, in a prepared statement.

"Small, compact, medium, large -- sales were strong across the board," he said.

"GM and the U.S. economy left July carrying good momentum," McNeil said. "The economy has bounced back strongly from the harsh winter, consumer confidence has reached a post-recession high, energy prices remain moderate and job growth continues."

Ford sold 212,236 vehicles, with retail sales up 7%. "July proved to be a very good month for Ford and Lincoln with positive gains across the board in all the major segments," said John Felice, Ford vice president of U.S. marketing, sales and service, in a prepared statement.

Ford Fusion set an all-time monthly sales record with 23,942 cars sold, a gain of 17% from the same month a year earlier. Western region sales gained 24%.

Ford Explorer sales gained 32% with 16,797 vehicles sold, the vehicle's best July since 2005. Ford Escape sales rose 19%, Escape's best July ever. Ford F-Series sales are rose 5% to 63,240 units. Ford said the gain was "achieved with the lowest incentives of the three largest pickup truck manufacturers."

Chrysler sales totaled 167,667, with Jeep sales up 41%.

"Chrysler Group had a solid July as each brand recorded sales gains on our way to a 20% year-over-year increase, our strongest July sales in nine years," said Reid Bigland, head of U.S. Sales, in a prepared statement.

Nissan sales rose 11.4% to 121,452 units, a July record. "The July 4th holiday got sales off to a great start, and the pace remained solid all month," said Fred Diaz, senior vice president, U.S. sales & marketing and operations, in a prepared statement.

Written by Ted Reed in Charlotte, N.C.
To contact this writer, click here.


TheStreet Ratings team rates FORD MOTOR CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FORD MOTOR CO (F) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, growth in earnings per share and increase in stock price during the past year. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Automobiles industry average. The net income increased by 6.3% when compared to the same quarter one year prior, going from $1,233.00 million to $1,311.00 million.
  • FORD MOTOR CO has improved earnings per share by 6.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern 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 25.1% in earnings ($1.31 versus $1.75).
  • F, with its decline in revenue, underperformed when compared the industry average of 21.5%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • In its most recent trading session, F has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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