Earnings season for auto and industrial are entering the final week. I usually don’t worry about commenting until all is over, but this season looks to hold few surprises. Ford and GM turned in respectable results, with cautious outlooks for US. IN Europe, VW crushed results and Germans prevailed, and among the Latins, Renault was the sole standout. Peugeot delivered, just not the way investors like, they warned the second time this year – hint, don’t do that! Fiat was actually the one Euro surprise, trying to optically dress up a worrisome situation. Now it’s time for the Japanese to report, and as if right on cue, the BOJ tried to prep the stage by pushing the yen back to the 77 range.
Some random thoughts:
- Kudos for ratings agencies for bringing F and GM closer to investment grade. Little worries over the outlook for the new GM bonds and Ford is delivering on Fcf. Plenty of fixed income investors out there, now about Chrysler?
- Why is it always about debt with Fiat and Sergio Marchionne, it was when he stepped in and still is. I don’t like hearing him talk about all these non-auto liabilities.
- Brazil better outperform my expectations. My thoughts are more muted than what everyone is expecting, but I guess with the Euro market in the dumps, you have to have hope.
- China still pumping out profit, I am especially looking to Nissan and Toyota to see what they got.
- US market is changing, I see Marchionne as the most optimistic on US market conditions, not just volume, but mix and price, but then again, when he has Europe driving Fiat, you gotta be optimistic on Chrysler.
Just a not on mix and pricing, every company calculates this differently, and often within a company it may not be consistent, but that’s another story.
Watch this week for the impact of the strong yen on J3 results, it will be big, meaning the number of the week is 2nd half yen/dollar & euro forecast. Tsunami and Thai flood impact is only noise, don’t worry about these.
I’ll have more thoughts as we close out this week. Call with any questions or comments.
03:27 AM Honda Motor (HMC): FQ2 operating profit -68% to ¥52.5B ($693M) vs. forecast of ¥63.5B. Net profit -55% to ¥60.43B. Revenue -16% to ¥1.9T. Withdraws annual guidance for earnings and global sales, due to the strong yen and floods in Thailand, where car factory operations are suspended indefinitely because of the floods. (PR) Comment!
05:19 AM GM (GM) forecasts that the growth in China’s car market this year will fall to 7-10% from 30% in 2010 and 50% in 2009, although CEO Daniel Akerson indicates this is a good thing. “You can’t have totally unbridled growth in a country evolving as quickly as China,” Akerson says. Surely that spinning sound is not coming from GM car wheels. Comment!