Ford, GM go opposite ways
In the same economic conditions, Ford and General Motors seem to be headed in opposite directions.
Ford’s third-quarter profit fell 56 percent to $957 million, while GM’s more than doubled to $2.77 billion. At GM, third-quarter revenue was up while Ford’s was down.
Through September, GM’s sales fell nearly 4 percent while Ford’s fell less than 1 percent, but GM cut low-profit sales to rental car companies.
Jeffries analyst Philippe Houchois says GM has introduced more new products than Ford, and new generally sells faster for more money. Ford also bet heavily on more expensive aluminumbodied pickup trucks, a good bet until fuel prices fell. Now competitors have more room to discount, Houchois said. “That kind of adds to the slight gloom that we hear from Ford,” he said.
Both stocks were punished after the earnings reports as investors anticipate a sales slowdown. Houchois rates GM as “neutral” and expects its stock price to rise 4 percent. He’s got Ford at “underperform” with the price falling almost 15 percent.