Analysts Predict Doom For Car Industry, Market Shrugs
Just when you thought shares of Ford and GM can’t get any lower, major brokerage Morgan Stanley “lowered its 2012 U.S. auto sales projections by about 3 percent and cut its earnings-per-share estimates for the North American auto sector due to weaker-than-expected sales in the United States and Europe,” Reuters says.
For what it’s worth, Morgan expects U.S. auto sales to be 14.4 million this year, down from its earlier projection of 14.8 million. What is more disconcerting is Morgan’s outlook on financials of U.S. makers.
The firm cut its earnings-per-share outlook for GM by more than 10 percent to $3.40 per share. That’s still above analysts’ consensus of $3.25 per share.
Morgan Stanley now estimates Ford’s annual earnings per share at $1.26, down 3.1 percent from its previous forecast of $1.30.
Europe puts a sever drain on U.S. automakers. Latin America is soft. China is still good, but taking a breather.
The Ford and GM shares were unimpressed by the dire predictions and opened mostly unchanged today. Our Grade the Analysts ranking is likewise underwhelmed: Morgan Stanley usually takes bottom position when they show up and play.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Punching imps isn't a pleasant experience for anyone. Just go find some ammo.
Considering the number of people unemployed - the total, not the 8% guff being thrown out by the gubmint - and the housing problems that will be with us for some time, I'm surprised the estimate is as high as it is.
I come home late at night and Ive noticed the repo trucks are appearing again.. with some nice rides in tow. How many sub-prime buyers are out there? Too much credit all over again,only not on homes.
I'm not surprised at all when I look around at the economy. A small business owner I personally know, he's got about a dozen employees and some weeks he has a tough time coming up with payroll. He's frozen wages, asking his employees to pay more of their benefits, asking employees not to take vacations this summer as he needs everyone available for work (for jobs he's not making money on... to make payroll), plus his work trucks are getting old and tired. He's scared to death of the economy, and the continual attack on him as being the enemy. He's about had it. My brother works for a place in a similar fix. My father-in-law also has an auto body shop that he's got on the market now for three years. Last year was the first year ever that he's lost money. He was telling me recently that his insurance work is way down, as a lot of people are choosing to live with a little damage and keep the money then to repair the car. My last employer closed shop several months ago after a tough two previous years (fortunately I got out in time). My current employer is in a hiring freeze, and I currently have two job titles. It's tough out there so who the hell wants to buy a new car? My cars are getting older then usual and for the fist time I"m okay with that.