2008 March 05 | money news blog

Archive for March 5th, 2008

05 03 2008

Ford Motor (F) to produce fewer vehicles this quarter

Posted by: in Products and Services

Filed under: From the boards, Products and services, Competitive strategy, Ford Motor (F)

Ford Motor (NYSE: F) announced this day that it plans to produce fewer cars during the first quarter this year than it did last year.

The company announced yesterday that it now expects to build 685,000 automobiles in North America during the quarter, a drop of 55,000 from the same period last year. That works out to a 7.4% decline.

Ford plans to improve its North American sales results in 2008, but still plans on seeing losses again this year. The company is in the middle of a turn-around plan that it thinks will take it back into profitability next year.

It has definitely been a tough run for the struggling automaker, and it is now predicting that it will have a 14 to 15% market share in the U.S. with its Ford, Lincoln and Mercury brands during the year.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor’s Observer.

Sears (SHLD) quarterly profit plunges 47.5% on weak sales

Posted by: in Products and Services

Filed under: Earnings reports, Forecasts, Products and services, Management, Wal-Mart (WMT), Sears Holdings (SHLD)

Shares of department store retailer Sears Holdings Corp. (NASDAQ: SHLD) have moved higher this morning, despite the fact that the company posted a 47.5% decline in fourth-quarter profit, hurt by increased markdowns and weak sales of its products.

The retailer announced that its quarterly profit dropped to $426 million, or $3.17 a share on declining margins as sales at its Kmart and Sears stores slipped due to the weak U.S. economy and increased competition. These numbers are down from $811 million, or $5.27 per share reported in the same period a year ago.

Included in the company’s earnings numbers was a one-time gain related to the sale of some assets. Excluding that, Sears earnings numbers would have come at $3.04 per share. Analyst estimates (which typically exclude one time items) was for $3.10 per share in the quarter.

Looking at revenue, Sears Holdings saw a drop of 6.8% to $15.1 billion, down from $16.18 billion a year earlier. The retailer had to face continued economic worries such as higher gasoline prices and declining housing markets that put a curb on consumer spending. Analysts forecast revenues of $15.26 billion for the quarter, according to Thomson Financial.

Looking at same stores sales (sales at stores open at least 12 months), the quarter saw a decline of 4.5%. Weak demand for apparel and home appliances resulted in declines of 4% at U.S. Sears stores and 5.2% at Kmart. Sears Holdings blamed not only the weak economy but also increased competition for its disappointing results as rivals such as Wal-Mart Stores Inc. (NYSE: WMT) or J.C. Penney Inc. (NYSE: JCP) benefited from the company’s lost lost traffic and sales.

Continued fears over a possible recession made the department store retailer face a pretty difficult 2007. The weak housing market and credit crush brought a slowdown in consumer spending whose effects are reflected in the company’s earnings.

Despite the disappointing quarter, traders seem to be betting that the worst is over the company, and have pushed shares of the stock up 2.5% to $104.40, up $2.80. Earlier in the session the stock had traded down as low as $98.07 before reversing course and moving higher.

Eliza Popescu is a financial writer for the online investment advisory service Investor’s Observer.