Big Three All Report Surge in Profits

Discussion in 'OT Driven' started by SilverStang01, Apr 21, 2004.

  1. SilverStang01

    SilverStang01 A vote is like a rifle; its usefulness depends upo

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    Ford Q1 Results!

    SAN FRANCISCO (CBS.MW) -- Ford Motor stock jumped almost 10 percent on Wednesday after stunning Wall Street with first-quarter earnings that doubled last year's profits and a higher financial outlook.

    Rebounding auto results and another strong performance from its finance unit bolstered the bottom line for the automaker.

    It was one of the strongest quarters since Bill Ford Jr. took over as Chairman and CEO in late 2001. And the Dearborn, Mich.-based automaker raised its financial expectations for the year.

    "This is the best quarter we have achieved since we began our back-to- basics efforts more than two years ago, and it clearly demonstrates our plan is working and building momentum," he said in a statement.

    Shares of Ford Motor (F: news, chart, profile) rose $1.35 to $14.91 with heavier-than-usual volume of almost 34 million shares as the third-most active stock on the NYSE.

    First-quarter net earnings totaled $1.95 billion, or 94 cents a share, up from $896 million, or 45 cents. Excluding special items, Ford earned $1.98 billion, or 96 cents a share.

    Revenue came to $44.7 billion, up from $40.8 billion.

    Analysts expected a per-share profit of 44 cents, according to Thomson First Call.

    "The magnitude of the earnings surprise is breathtaking," wrote Deutsche Bank auto analyst Rod Lache in a morning research note.

    In the preceding quarter, Ford lost money as it took big one-time charges tied to Visteon. See full story.

    Worldwide auto operations earned $1.81 billion, up more than $1 billion from last year. Sales increased 13 percent, or $4.6 billion, to $38.8 billion. Worldwide unit sales in the quarter totaled 1.79 million units, up from 1.70 million a year ago.

    In North America, profit at the auto operations totaled $1.96 billion, also an improvement of more than $1 billion.

    "Cost reductions and higher net price drove big North American year-over-year gain, far ahead of expectations," wrote Prudential Equity Group analyst Michael Bruynesteyn.

    The European luxury brands in the Premier Auto Group brought in a profit of $20 million with sales of $6.8 billion, a 26 percent increase.

    Ford Credit earned $688 million, up $246 million from last year as used vehicle values strengthened and low interest rates spur more financing.

    Looking to the second quarter, Ford expects to earn 30 cents to 35 cents a share. And for 2004, the per-share profit range is now $1.50 to $1.60 a share, a 30-cent increase in the expected range of earnings. The full-year forecast excludes 7 cents a share in one-time items.

    Both Bruynesteyn and Lache wrote that they wondered if investors will now think that Ford is still playing down its profit outlook.

    On Tuesday, General Motors (GM: news, chart, profile) also reported stronger financial results than Wall Street had expected. Shares rallied accordingly, sending the Dow component sharply higher. See full story.
     
  2. TriShield

    TriShield Super Moderator® Super Moderator

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    Ford Turnaround Plan Shows Fantastic Results

    Ford's Profits Bounce Back

    [​IMG]

    Ford's second-quarter income was more than double its first-quarter net, rising to $1.95 billion, according to press reports.

    The rise in profits was attributed to continued cost-cutting, record earnings by Ford's financial unit, and stronger automotive results reflecting success with higher prices in the U.S., The Wall Street Journal reported.

    Ford's North American auto operations had pretax profits in the first quarter of $1.96 billion, up from $1.2 billion a year before and ahead of GM's $586 million in pretax North American auto profits.

    Earnings from continuing operations, which exclude special items, were $1.98 billion, or 96 cents a share, exceeding Ford's earlier forecast of 40 cents to 45 cents for the latest quarter. Ford's total sales and revenue in the first quarter rose to $44.7 billion from $40.8 billion.

    Ford's core automotive business posted a pretax profit of $1.81 billion, compared with $662 million a year earlier, on sales of $38.8 billion. Ford Motor Credit, the automaker's financial unit, reported net income of $688 million, compared with earnings of $442 million a year earlier, helped by improved credit loss performance, higher used-vehicle prices and low borrowing costs.

    In Europe, Ford earned pretax profit of $5 million, excluding special items, compared with a loss of $247 million a year earlier.

    Ford's Premier Automotive Group, a mix of European luxury brands including Jaguar, Volvo, Land Rover and Aston Martin, posted a pretax profit of $20 million compared with a pretax loss of $88 million in the 2003 period. The improvement reflected lower costs, higher sales and higher prices.

    In Asia, Ford earned a pretax profit of $28 million, compared with a pretax loss of $25 million a year ago. Ford's South America operations reportedly made $15 million in pretax profit, a $46 million improvement from the first quarter of 2003.

    Results for the January-March period easily surpassed Wall Street forecasts. Reuters reported.

    "This is the best quarter we've achieved since we began our back-to-basics efforts more than two years ago, and it clearly demonstrates our plan is working and building momentum," said chairman and chief executive Bill Ford.
     
  3. TriShield

    TriShield Super Moderator® Super Moderator

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    Ford ups '04 earnings forecast after robust Q1

    Reuters, Apr 21 2004

    By Tom Brown

    DEARBORN, Mich., April 21 (Reuters) - Ford Motor Co. <F.N> boosted its full-year earnings guidance on Wednesday after the embattled automaker posted its best financial results in years, pushing its shares up nearly 8 percent in premarket trading.

    Ford said its net earnings more than doubled to $1.95 billion, or 94 cents a share, from $896 million, or 45 cents a share, a year earlier.

    Excluding special items Ford, which said it slashed automotive costs in the quarter by about $600 million, earned 96 cents a share.

    The robust performance, buoyed by surprisingly strong gains in Ford's automotive business, comes as it struggles against cut-throat competition and a declining U.S. market share.


    The second-largest U.S. automaker, led by family scion Bill Ford Jr., is also continuing a massive restructuring program aimed at ensuring annual pretax profits of $7 billion by mid-decade.

    "This is the best quarter we have achieved since we began our back-to-basics efforts more than two years ago," Chairman and Chief Executive Bill Ford said in a statement.

    "It clearly demonstrates our plan is working and building momentum," he said.

    Ford's previously announced cost-cutting target was more than $500 million for all of 2004.

    Wall Street analysts on average were expecting first-quarter earnings of 44 cents per share, according to Reuters Research, a division of Reuters Group Plc.

    Ford also said it was raising its full-year earnings forecast from a range of $1.20 to $1.30 per share to between $1.50 and $1.60 a share.

    "On surface, this looks like a very strong set of results from Ford, with North American auto driving most of the upside," JP Morgan analyst Himanshu Patel said in a research report. "Also aiding earnings (to a lesser extent) was Europe and Ford Credit."

    On Tuesday, archrival General Motors Corp. <GM.N> also reported better-than-expected earnings and raised its profit outlook for the year.

    Ford's market share in the United States fell by 1.2 percentage points in the first quarter and its U.S. sales were off 1.3 percent. But Ford executives contend that most of those losses stemmed from efforts to focus on profit and make overall sales less dependent on the low-margin fleet and daily rental business.

    Ford said the net prices on its cars and trucks rose in the first quarter, contrary to GM, which said Tuesday that its prices fell due to high incentive costs. GM's high incentives, however, helped the automaker gain market share in the first quarter, and GM boosted its low-margin fleet sales.

    While Ford's U.S. vehicle sales were down for the quarter, its total revenues rose to $44.69 billion from $40.82 billion in the quarter a year ago.

    Ford's automotive unit had a pretax profit of $1.82 billion, meanwhile, compared with $662 million a year ago.

    Its financing arm, Ford Credit, reported record net income of $688 million, up from $442 million in the same period a year ago.

    Ford's North American auto business saw pretax profit jump to $1.97 billion, up by $722 million from the year-ago quarter.

    Ford Europe, where Ford took a $29 million restructuring charge stemming from thousands of job cuts announced last year, posted a pretax profit of $5 million compared with a loss of $247 million a year ago.

    The Premier Automotive Group, Ford's stable of European-based luxury brands, had a pretax profit of $20 million compared with a loss of $88 million a year ago.

    Even Ford's South American operations, which have long struggled to get back into the black, posted a $15 million profit for the quarter. Sales in the region were $650 million, up from $330 million last year.

    "We are very pleased with our first-quarter results across all our automotive and financial services operations," said Chief Financial Officer Don Leclair.

    The automaker forecast second-quarter earnings of 30 cents to 35 cents a share, excluding any special charges. Analysts on average were expecting 36 cents a share in the second quarter, according to Reuters Research.

    [​IMG]
     
  4. WickedLou9

    WickedLou9 Deep cover terrorist gerbil

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    Ford > Chevy
     
  5. TriShield

    TriShield Super Moderator® Super Moderator

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    Once again, lower sales doesn't always mean lower profits.
     
  6. Hurricane

    Hurricane E=mc^2

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    How many new models did ford Release for 2004? F150 and what else?

    Might have something to do with it. I imagine retooling plants for new models and training production staff on the new models costs some fair change.
     
  7. Possum Stomper

    Possum Stomper The Great Bird of the Galaxy

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    :cool:

    nice to see them getting back on track
     
  8. SilverStang01

    SilverStang01 A vote is like a rifle; its usefulness depends upo

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    2005 mustang, 500, freestyle, esacpe hybrid, s40, mazada 6 hatch/stawag/jag xl, new focus = win
     
  9. Butz

    Butz Guest

    Ford is on the right track to retrieve its rightful place:cool:
     
  10. DMClark

    DMClark Active Member

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    hrm.. Bill Ford reminds me of another guy who was once in the car industry by some of the things he is doing.
     
  11. TriShield

    TriShield Super Moderator® Super Moderator

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    First Ford, Now Chrysler Group Reports Surge in Profit.

    Operating profit doubles at Chrysler

    [​IMG]

    BY SARAH A. WEBSTER
    FREE PRESS BUSINESS WRITER
    April 30, 2004

    Speculation that DaimlerChrysler AG CEO Juergen Schrempp might resign and concerns about other management changes at the company overshadowed positive news Thursday that the Auburn Hills-based Chrysler Group doubled its operating profit in the first three months of the year -- despite having to spend more money on workforce cuts.

    Although its parent company reported lower profits, operating profit for the Chrysler Group surged $366 million on revenues of $14.8 billion, despite a $91-million restructuring charge. The charge was primarily for workforce reductions above and beyond the 35,000 jobs cut in the last three years.

    In the first quarter of 2004, 460 employees took voluntary retirement, mainly at an electronics plant in Huntsville, Ala., which was sold to Siemens VDO Automotive Electronics Corp. What's more, 1,808 employees, mainly from the Huntsville plant, were forced to take early severance plans, for a cost of $1.2 million, the first-quarter report says.

    In the first quarter of 2003, the Chrysler Group reported an operating profit of $166 million on revenues of $13.8 billion. So based on the improved performance and expectations that new products will be popular, the Chrysler Group upgraded its guidance for the year to "considerable positive earnings."

    The Stuttgart, Germany-based parent company, however, saw net income decrease by more than 24 percent. That was largely blamed on the appreciation of the euro against the dollar, poor results in the Mercedes and financial service divisions, and losses from the company's 37-percent stake in Mitsubishi Motors Corp.

    Net income for DaimlerChrysler decreased to $483 million, or 48 cents a share, on revenue of $39.8 billion. That compares with net income of $641 million, or 63 cents a share, on revenues of $36.7 billion, during the first three months of 2003.

    DaimlerChrysler's operating revenue, however, increased 24 percent, to $1.9 billion from $1.5 billion.

    Although worldwide sales of Chrysler Group's Chrysler, Dodge and Jeep vehicles were up 6 percent, to 684,800 vehicles, sales of Mercedes-Benz vehicles were down 9 percent, to 266,000 cars and trucks. Commercial vehicle sales, meanwhile, were up 18 percent, to 125,800.

    This is how DaimlerChrysler's divisions performed:

    The Mercedes car division, which also includes the Smart brand, reported operating profits improved to $785 million on revenue of $14.4 billion from an operating profit of $750 million on revenues of $13.5 billion a year ago.
    Although the operating profits and revenues increased in U.S. dollars, when translated into euros, both actually decreased by at least 6 percent. DaimlerChrysler attributed the poor performance to weak demand in major markets and the launch of the SLK and Smart Forfour.

    The commercial vehicle division, which sells brands such as Freightliner and Sterling, reported a major increase in operating profits, to $329 million on revenue of $8.1 billion from an operating profit of $15 million on revenue of $6.7 billion a year ago. That translated into a profit increase of 470 percent in euros.

    DaimlerChrysler's financial services division reported a decrease in operating profit, to $272 million on revenues of $4.1 billion from $457 million on revenues of $3.9 billion a year ago. That included a major charge of $330 million for a troubled joint venture, called Toll Collect GmbH, with Deutsche Telekom AG and French firm Cofiroute to develop an automatic toll system for trucks.

    The company's "other activities" division, which reports on investments in Mitsubishi Motors Corp. and European Aeronautic Defence and Space Co. (EADS), reported an increase in operating profit, to $165 million from $114 million a year ago. DaimlerChrysler would not say how much EADS contributed to the division or how much Mitsubishi's still-unreported 2003 losses would affect its bottom line for the first quarter.

    However, Chief Financial Officer Manfred Gentz said that, in 2003, the Mitsubishi investment drained $83 million from DaimlerChrysler's operating profit and $281 million from net income.

    DaimlerChrysler's overall results follow a drop in net income between the first quarter of 2002 and 2003. Net income fell 72 percent during that period, from $2.3 billion, or $2.31 per share, on revenues of $32.2 billion in the first quarter of 2002.

    [​IMG]
     
  12. SaintGRW

    SaintGRW OT Supporter

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  13. jinushaun

    jinushaun New Member

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    What about Ford? :eek4: Last I heard, they're not doring too hot--esp in Europe.
     
  14. Jumpem

    Jumpem OT Supporter

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    Good for them. Business is about making money for owners/shareholders not creating employment.
     
  15. Emfuser

    Emfuser Nuclear Moderator Super Moderator

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    Don't listen to them, the US economy is going to crash!!!! DOWN WITH BUSH!!!



















    :mamoru:
     
  16. jinushaun

    jinushaun New Member

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    Sweet. :cool:
     
  17. Emfuser

    Emfuser Nuclear Moderator Super Moderator

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  18. TriShield

    TriShield Super Moderator® Super Moderator

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    Ford and GM are both up now due to cutting costs and improving manufacturing efficiency. Ford's Q1 results were most impressive of the three.
     
  19. LOtown

    LOtown Active Member

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    Good to hear Ford is up...When they're in the shitter, I get hosed at work...

    Come on profit sharing 2004...:x:
     
  20. iZero

    iZero Guest

    The PT is still on my list.
     
  21. TriShield

    TriShield Super Moderator® Super Moderator

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    Good DCX report likely - Speculation over CEO goes on

    BY SARAH A. WEBSTER
    FREE PRESS BUSINESS WRITER
    April 29, 2004

    DaimlerChrysler AG will report first-quarter earnings today that are expected to show the Auburn Hills-based Chrysler Group truly is on the mend.

    But the results aren't expected to reveal much about recent developments that make the future of the 6-year-old German company appear uncertain.

    That is especially true for CEO Juergen Schrempp -- the former Daimler-Benz AG leader who masterminded the company's combination with the Chrysler Corp. in 1998 and invested in Mitsubishi Motors Corp. in Japan and Hyundai Motors Co. in South Korea 2 years later.

    Now that long-struggling Chrysler is improving, Schrempp's grand vision to create a global automotive empire seems in jeopardy after DaimlerChrysler's supervisory board failed to back a bailout of Mitsubishi last week. DaimlerChrysler has has a 37-percent stake in that company.

    DaimlerChrysler also is paring down its relationship with Hyundai, in which it has a 10-percent stake.

    After the release of financial data today, DaimlerChrysler's supervisory board will gather in New York for a meeting that is expected to center on the company's faltering Asian strategy and might address Schrempp's future.

    In many respects, the Mitsubishi news was positive for DaimlerChrysler and should be for Schrempp as well.

    Wall Street reacted favorably. DaimlerChrysler shares have gained 6 percent since the announcement and closed at $45.91 on the New York Stock Exchange on Wednesday.

    Still, the recent developments with the company's Asian partners seem to rattle Schrempp's global plan and have renewed speculation that he is washed up, despite the fact his contract was renewed this month and puts him in charge through 2008.

    At the company's annual meeting April 7, shareholders battered Schrempp with calls for his resignation.

    After the Mitsubishi development, a German publication, Frankfurter Allgemeine Zeitung, reported that Schrempp offered to resign and his future will be addressed at the supervisory board meeting.

    DaimlerChrysler spokesman Han Tjan, however, dismissed that article as "rubbish."

    Schrempp has survived this kind of talk before. Questions were raised about his viability after DaimlerChrysler's earnings dropped 90 percent in the second quarter of 2003, led by the Chrysler Group's stunning $1.1-billion operating loss.

    Schrempp defended his plans at the time. He referred to the loss as a "setback" and noted, "If you look at the trend, we are moving in the right direction. This problem has no effect whatsoever on our great strategy."

    Today, the Chrysler Group does indeed appear on track.

    With a stable of new products, the division that has suffered since 2000 is expected to post positive results today. The company posted a $166-million operating profit in the first quarter of 2003.


    But the fire is burning in DaimlerChrysler's Asian house.

    Schrempp has not yet answered questions about Mitsubishi publicly. However, Manfred Gentz, the company's chief financial officer, told journalists and analysts that Schrempp's strategy remains in place and Mitsubishi will survive without more investment from DaimlerChrysler.

    Gentz said Mitsubishi's joint projects with Chrysler and its Smart car division are safe and sound and that it was Schrempp who backed away from the bailout plan -- an assertion some insiders considered unlikely. Mitsubishi, Gentz said, has other possible avenues to raise capital beyond DaimlerChrysler. Indeed, on Wednesday the Financial Times reported that Mitsubishi is seeking investment from the Japanese government, and the Japanese publication the Nihon Keizai Shimbun reported that other members of the Mitsubishi group, such as Mitsubishi Heavy Industries Ltd., will step up with funding for Mitsubishi Motors.

    DaimlerChrysler's Tjan reinforced the notion that Mitsubishi and DaimlerChrysler will still work together. He noted that Eckhard Cordes, a member of DaimlerChrysler's board of management, is expected take a board seat at Mitsubishi.

    While it would be desirable and a clever feat for DaimlerChrysler to get somebody else to fund the bailout of Mitsubishi, all these developments have a lot of automotive insiders wondering if the tall, confident Schrempp is holding on by his fingernails.

    Gerald Meyers, former American Motors Corp. chairman and a University of Michigan management professor, sees Schrempp's star "descending at an accelerated rate" even if Mitsubishi is rescued by someone else, as he thinks it will be.

    "He's made so many boo-boos," Meyer said. "In the United States, he would have been finished a year ago."

    No matter what happens, Gentz said the company likely will find a new strategy in Asia, where other automakers have been enjoying phenomenal growth and success. And at the very least, DaimlerChrysler's metro Detroit team is breathing easier because bright lights are directed at other operations for a change.

    Chrysler Group spokesman Jason Vines acknowledged DaimlerChrysler's future with Mitsubishi and Hyundai are "question marks right now," but he said Chrysler's current partnerships with those companies are solid and the global automaker isn't on the rocks.
     
  22. TriShield

    TriShield Super Moderator® Super Moderator

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    They're going to sink faster than the Titanic if the Japanese government doesn't help them. :eek3:
     
  23. TriShield

    TriShield Super Moderator® Super Moderator

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  24. TriShield

    TriShield Super Moderator® Super Moderator

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    General Motors surprises market, sees strong 2004 earnings

    [​IMG]

    Tue Apr 20,10:13 AM ET

    DETROIT, United States (AFP) - General Motors, the world's biggest automaker, predicted an exceptionally strong year for earnings in 2004 as it topped Wall Street forecasts for first quarter results.

    GM said its net profit for the quarter was 1.28 billion dollars or 2.25 dollars per share, well ahead of the 1.79 dollars per share expected by Wall Street analysts.


    The net profit was down 13.5 percent from the same period a year ago, but the results from a year ago included a one-time 505 million dollar gain from the sale of its GM Defense unit. Excluding that gain, the profit was up 24 percent.

    Revenues grew 1.35 percent from a year ago to 47.48 billion dollars for the period to March 31.

    The biggest surprise for Wall Street, however, was the outlook for the full year by GM. It boosted its profit forecast for the year to seven dollars a share from an earlier forecast of between six and 6.50 dollars.
    That compared with an average forecast of 6.30 dollars per share by analysts polled by Thomson Financial/First Call.

    GM also said it expected US auto sales by all manufacturers to be a strong 17.3 million units for 2004.

    Worldwide, GM said its share of the automobile market increased to 13.7 percent from 13.6 percent a year ago.


    "Our financial results in the first quarter reflect continued progress," said GM chairman and chief executive officer Rick Wagoner.

    "GM continues to improve in key areas such as productivity and quality. Even more important, our many new products around the world are being well received. But, we still have more work to do to improve our profitability, as we face a challenging competitive environment, continuing high health-care costs and the effects of the artificially weakened Japanese yen."

    [​IMG]
     
  25. TriShield

    TriShield Super Moderator® Super Moderator

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    Earnings reports lead to Ford, GM bond rally - New models, strong economy to help, too

    BY WALDEN SIEW
    BLOOMBERG
    April 29, 2004

    Bonds of Ford Motor Co. and General Motors Corp. are rallying in the wake of higher earnings from the automakers, and some analysts said their debt will likely continue to strengthen.

    Traders say the extra yield, or spread, investors demand to own auto bonds -- as opposed to risk-free government bonds -- has narrowed as much as 25 basis points, or 0.25 percentage point, since April 19, before the earnings reports were released. Investment-grade bond spreads overall tightened 3 basis points to 87 basis points on average.

    Bond yields fall as bond prices rise.

    A combination of faster economic growth and the introduction of new vehicle models later this year are likely to boost sales for corporate bond bellwethers such as Ford and GM, said analysts at Morgan Stanley and Banc of America Securities. Increased sales can improve the ability of borrowers to meet debt payments. Ford and GM are two of the three biggest debtors in the Lehman Credit Index.

    "Auto bonds retain value because it is a classic cyclical play on the economy," said Rizwan Hussain, U.S. credit strategist in New York at Morgan Stanley. Auto bonds are among the best investments now in corporate debt, he said. "This trend can continue."

    Ford's profits more than doubled in the first quarter to $1.95 billion, the highest in four years. GM's Asian earnings almost quadrupled and finance-unit profit rose 12 percent, bringing the largest automaker's earnings to $1.28 billion. The companies raised forecasts for the year.

    The spread on Ford's 7-percent notes maturing in 2013 has narrowed by about 22 basis points since April 19 to about 205 basis points according to Trace, the bond reporting system of the National Association of Securities Dealers. The spread for GM's 6.875-percent notes maturing in 2011 narrowed about 16 basis points to 237 basis points.

    "It looks as though this environment will support continued spread consolidation within the auto sector," Timothy Patrick, global head of high-grade debt research at Banc of America in Charlotte, N.C., wrote in a research report.

    Patrick said Ford used cash to buy back $1 billion in its long-term debt last year and more than $700 million in the first three months of this year.

    "This is a very bullish sign in our view that Ford is gaining confidence in their business," Patrick said.

    Recent gains highlight a turnaround in the bonds of automakers. Faster economic growth has brought back investor demand since concerns about profitability drove up yields on Ford's bonds to the level of below investment-grade rated companies such as Tyco International Ltd. in 2002.

    The spread on Ford's 7-percent notes has shrunk from 600 basis points in the past 19 months, according to Merrill Lynch & Co. The spread on General Motors' 6.875 percent notes maturing in 2011 has narrowed from 439 basis points.

    Ford is rated Baa1 by Moody's Investors Service and BBB- by Standard & Poor's, the third-lowest and lowest investment-grade levels. GM is rated Baa1 by Moody's and BBB by S&P.

    [​IMG]
     

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