Shares of Ford Motor Co. (F) 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 (MCO) 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 (TM), 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.
Read the full analyst report on “F”
Read the full analyst report on “MCO”
Read the full analyst report on “TM”
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