According to Credit Suisse, FoMoCo could see profits decline from 2010 to 2011 as a result of higher material and structural costs. The company also faces a nearly $900 million increase in pension expenses in 2011. “To the extent that Ford has been a great earnings momentum story, it will be difficult, in our view, for the shares to push higher in the face of declining earnings,” analysts wrote in a note to clients.
Credit Suisse also warns of a “˜step-down” in the profit contributed from Ford Credit, as 2010 gains have been nice due to higher lease residuals and record-low credit losses. Analysts are saying that Ford, – the only U.S. manufacturer to avoid bankruptcy and restructuring could earn as much as $1.84 per share in fiscal 2010, and $1.90 in FY 2011.
Shares of Ford closed the day Tuesday at $12.55 on the NYSE. that’s down 14% from the 52-week high reached back in April.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)