Ford Motor Company (NYSE: F) sales in the U.S. are driven by the F-Series full-sized pickup. Most of these are the F-150 model, a new version of which was recently released. In the second quarter, Ford sold 180,825 F-Series vehicles against total sales across all models at 433,869. The ratio shows how critical F-Series sales are.
The F-Series did hold its own against the Ford total. Its sales dropped by 22.7%. Ford’s total sales were off 33.3%. Analysts believe that F-Series profit margins are high compared to many other Ford models, which should have helped Ford’s margins. Ford also claimed F-Series sales increased its market share within the category. Since Ford may not have known the figures from its competitors, it is worth asking where that figure came from.
Wall St. remains skeptical about Ford’s financial prospects. According to 24/7 Wall St.: “Ford Motor Co.’s senior unsecured debt is rated Ba2, two notches below investment grade, and also carries a negative outlook.” Its debt, therefore, is a highly risky investment. Ford’s stock is down over 40% in the last year, while the S&P is over 4% higher.
In March, Ford eliminated its dividend. This payout is likely critical to the net worth of the Ford family. That, in turn, raises the question of how long the Fords will give current management.
Ford’s struggles make the success of its new F-Series model all the more important. Launched just days ago, Ford management made it clear how essential its future will be. Jim Farley, Ford’s chief operating officer said: “Since 1948, our hardworking F-Series customers have trusted Ford to help them get the job done. F-150 is our flagship, it’s 100 percent assembled in America, and we hold ourselves to the highest standard to make sure our customers can get the job done and continue to make a difference in their communities.”
In the American car industry, truer words cannot be spoken.
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