Browse by Tags
-
Posted
Apr 28 2008, 09:01 AM
by
Robert Walberg
Rating:
Here he goes again. After runs at General Motors and Chrysler LLC in recent years, Kirk Kerkorian's investment company, Tracinda Corp, issued a release stating that it plans to bolster its stake in Ford to 5.6%, by offering $8.50 per share in cash for an additional 20 million shares. Kerkorian already owned 4.7% of the stock, or 100 million shares, at an average cost of $6.91.
Kerkorian cited Ford's improved operating performance as the rationale for his investment. Last week Ford shocked the markets when it announced a quarterly gain of 20 cents per share. The street was looking for a per share loss of 16 cents. Ford has now handily beaten the consensus estimates for six consecutive quarters, giving credence to Kerkorian's claim that the company's turnaround efforts are gaining traction.
Read More...
-
Posted
Apr 16 2008, 11:22 AM
by
Anthony Mirhaydari
Rating:
In a rare release of good news, General Motors announced that its Latin America, Africa, and Middle East operating region set an all-time sales record for the first quarter: Over 323,000 vehicles sold, up nearly 53,000 units from the same period last year.
The 20% increase easily beats the industry’s 12% growth rate for the region and brings the company’s market share to 18%. Even if U.S. consumers aren’t crazy about Detroit’s small cars, and have ended their love affair with super-sized SUVs, the rest of the world is rollin’ American style.
Read More...
-
Posted
Apr 03 2008, 11:45 AM
by
Douglas McIntyre
Filed under: Apple, Comcast, Ford, DirecTV, Verizon, Sirius, XM Satellite Radio, AT&T, Time Warner Cable, Toyota, GM, Clear Channel, Dish Network
Rating:
When the Justice Department cleared the merger of Sirius with XM Satellite there was anticipation that once the deal got done the shares of both companies would go up. A year ago, the combination was viewed as a dream deal.
If anything, the shares have dropped. Sirius is below $3 and XM is below $13. The market began to realize that the year wasted on getting government approval was a year the companies need to stay competitive. XM has over $1 billion in debt. Refinancing it in the current market would be nearly impossible. Selling shares would lead to extremely large dilution. As we recently noted, Goldman Sachs even put Sirius on its "Conviction Sell List" with a price target of $2.25.
Growth at Sirius has slowed considerably. In the fourth quarter revenue rose only 29% to $250 million. But, for the full year, revenue was up 45%. Subscriber deactivations in the fourth quarter were almost 540,000 compared to 330,000 in the same quarter of 2006. The firm's net loss was $166 million. Long-term debt was almost $1.3 billion.
Read More...
-
Posted
Mar 14 2008, 08:40 AM
by
Robert Walberg
Rating:
While the old saw "as goes General Motors, so goes the nation" no longer holds much relevance, it's interesting to note that with oil prices skyrocketing to $110 per barrel, gold prices reaching the $1000 per ounce pinnacle and the economy on the brink of recession, that GM's shares have plunged to levels not seen since Ronald Reagan was president. So even though GM and the auto industry no longer drive the U.S. economy, they most certainly are victims when it crashes.
Of course, like the passenger that gets seriously injured for failing to fasten their seatbelt, much of the pain GM feels today is the result of its own bad decisions. When gas prices were cheap (hard to believe that we're only talking a few years ago), GM and its brain trust decided that bigger was better. So it gave us the Cadillac Escalade, GMC Yukon and Chevy Suburban. If that weren't enough, the company decided to acquire the Hummer brand name -- the very symbol of SUV excess, especially with regard to burning gas.
Considering that margins were higher in these oversized vehicles, and that consumers couldn't buy big enough, you could hardly blame them for chasing the almighty dollar. Unfortunately, management's job is to not only address the current needs but to envision where the marketplace is going -- and on that front GM failed miserably. It didn't foresee the relentless climb in energy prices, leaving it with a boatload of unwanted inventory and a dearth of smaller, gas/green friendly cars.
Read More...
-
Posted
Feb 28 2008, 04:09 AM
by
Robert Walberg
Rating:
Like the former high-school baseball star in the Springsteen song, Michael Dell knows how glory days can pass you by in the wink of a young girl's eye. His company, Dell, delivered yet another earnings disappointment last night. The former king of the PC industry cited higher-than-expected costs for the earnings shortfall. The excuse may be new but falling short of estimates has become old hat to Dell.
Not that long ago, Dell rode its cheap cost structure, build-to-order model and aggressive market campaign to the top of theh PC world. But after years of management missteps, the company finds itself looking up at Hewlett-Packard much the way General Motors finds itself trailing Toyota. About the only category in which Dell surpasses HP these days is in restructuring announcements. According to Mr. Dell, the current plan, which calls for more staff reductions and improved operating efficiencies, is apt to adversely impact near-term earnings growth. No kidding.
But I'll tell you what the restructuring plan isn't going to do -- it's not going to resolve the company's long-term problem any more than the dozen or so turnaround efforts have resurrected GM. And the reasons are much the same -- both management teams are too focused on the bottom-line and not focused enough on the big picture. Dell's problem isn't that the call center in Canada is overstaffed, it's that the company no longer possesses a significant cost advantage over the competition. Dell was never a very innovative company -- its strength was in the cost savings produced by the model. That cost benefit doesn't exist any more and simply adding new channels to sell product that's priced about the same as Toshiba, Acer and HP just isn't going to get it done.
Read More...
-
Posted
Feb 11 2008, 01:44 PM
by
Douglas McIntyre
Like some many unsuccessful companies before it, Chrysler wants to cut its way to profitability. The privately held company, run by Home Depot exile Robert Nardelli, will probably chop its number of brands 50% and dealerships by a third.
According to The Wall Street Journal, "over the next three years or so, the now closely held auto maker plans to drop as many as half of the approximately 30 vehicles it now produces, a move likely to cut sales at least for a while." A while may be forever.
It is not believable to think that Toyota, Honda, and, to a lesser extent, GM will not market vehicles directly into the niches which Chrysler gives up. Toyota especially has the dealer network and broad brand line-up to do this.
Read More...
|
