Back to top

Analyst Blog

Shares of Ford Motor Co. ([url=http://www.zacks.com/stock/quote/f]F[/url]) surged to $14.15 in afternoon trading yesterday for the first time in 5 years. The stock price rose 4.9% since January 2005 before it closed at $14.10 Wednesday.

The 5-year high was primarily driven by Moody's Investors Service’s ([url=http://www.zacks.com/stock/quote/mco]MCO[/url]) upward revision of Ford's corporate family rating and probability of default rating to “B2” from “B3.” The agency also lifted the company’s secured credit facility to “Ba2” from “Ba3,” and its senior unsecured debt to “B3” from “Caa1.”

Moody’s upward revision was forced by Ford’s potential to improve its finances over time and its new product program as the company plans to start selling a new global Fiesta subcompact this year and a new Focus compact early in 2011.

The 5-year high stock price is a recovery from a low of $1.26 on November 19, 2008, when Ford was struggling with the global economic crisis. The company’s aggressive restructuring plan has enabled the take-off, which also helped it bypass bankruptcy unlike its cross-town rivals General Motors and Chrysler.

Last month, Ford led all U.S. automakers, outperforming General Motors for the first time in nearly a decade in terms of sales growth, sales volume and market share. The company’s sales advanced 43% to 142,285 vehicles with a staggering 74% rise in fleet sales, as it grabbed customers from Toyota Motors ([url=http://www.zacks.com/stock/quote/tm]TM[/url]), which has been struggling with automotive safety recalls. According to Autodata Corp., Ford won an 18.2% market share during the month.

In 2009, Ford has shown a profit of $8 million (excluding special items), driven by favorable net pricing, structural cost reductions and strong Ford Credit results. This was the company's first annual profit since 2005 and an improvement of $7.3 billion over 2008.

Ford has achieved $5.1 billion in Automotive structural cost reductions, exceeding its full-year target of about $4 billion for the year. This was helped by lower manufacturing and engineering costs, reduction in pension and retiree health care expenses, and lower advertising and sales costs.

Ford’s Financial Services segment reported a pre-tax operating profit of $683 million, compared to a loss of $384 million a year ago. Ford Credit reported a pre-tax operating profit of $696 million, compared with a loss of $372 million a year ago. The increase reflected lower residual losses due to higher auction values and lower provisions for credit losses, offset partially by lower volumes.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CTPARTNERS… CTP 13.33 +3.49%
SAIA INC SAIA 45.65 +1.00%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
FIRSTSERVIC… FSRV 55.66 -0.13%