Ford (F) posted strong domestic earnings in its most recent quarter, but overseas results were weak. Ford posted losses in Asia/Africa and Europe. In Asia, the company is spending heavily on future growth in China, but European sales could continue to deteriorate.
Some region other than North America will have to show impressive results for the stock to move, argues Craig-Hallum analyst Steve Dyer.
“North American strength continues to offset a soft auto environment in most of the rest of the world, a theme we think will hold true for awhile. As a result, we think the stock is likely range-bound until one of those two things breaks materially for the better or worse, neither of which seems overly likely to us in the near term given the dynamics in each market. In the two geographies that can move the needle for Ford, North America seems to be comfortably in a mid-14s (SAAR) selling environment, with pent up demand fueling sales. ItÂs not clear to us how we go materially better or worse in the near future. In Europe, sales remain soft amid overcapacity and coming off of prolonged scrappage programs. ItÂs hard to see how thing improve materially there as well although there are scenarios where current estimates look too rosy.”
