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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (1512)	10/16/2003 12:11:51 PM
From: ild	Read Replies (2) \| Respond to of 110194

Ford financial services division earned $1,032 million. How do you make money offering 0% loans? From JPM research on Ford numbers: • EPS Actual: $0.15 • EPS Expected: -$0.12 • EPS Consensus: -$0.11 At $0.15 per share, Ford beat the consensus (loss of $0.11) and our estimate (-$0.12) by a wide margin. However, $0.19 of the $0.27 by which the company beat our estimate came from unexpectedly high Ford Motor Credit earnings and unexpectedly low "other" expense, neither of which may be repeatable. Exluding these items, Ford beat our estimate by $0.08 per share, mainly due to smaller than expected North American automotive losses. We expect a positive stock market reaction. Key reasons for variance to estimates: >The biggest source of upside in Ford's earnings was unexpected high earnings at its financial services division, which earned $1,032 million pre-tax, $341 million above our forecast. This added $0.13 to EPS, $0.11 of which came from Ford Motor Credit. We think the Street will be reluctant to give too much credit for the positive surprise at Ford Motor Credit, as the upside may not be repeatable. >Another big source of upside was "other automotive" expense, which came in at -$1 million, versus our expectation for $215 million. This added $0.08 per share to EPS. This category consists primarily of net interest expense, and it typically runs at about $200 million per quarter. We doubt that the company will get much credit for what may be a temporary reduction in this expense. >The good news that the market will pay for, in our view, was Ford's North American automotive operations, which lost only $116 million versus our estimate for a pre-tax loss of $303 million. This added $0.07 to Ford's EPS. >Ford's international operations lost $438 million pre-tax, in line with our expectations. Europe lost $396 million, $90 million more than we expected, while South America, lost only $26 million, $90 million less than we expected. Forward estimate implications: >The company raised its full year guidance to a range of $0.95 to $1.05, from the previous $0.70. However, almost all of the increase is the result of the better-thanexpected Q3 result. The company effectively blesses the Q4 consensus of $0.18 (our estimate is $0.15). Stock interpretation: >We expect a positive stock market reaction.

To: russwinter who wrote (1512)	10/17/2003 10:56:27 PM
From: Archie Meeties	Read Replies (1) \| Respond to of 110194

Editorial in the FT by a Japanese banker who suggested that the best way for China to revalue would be through an incremental change, so as to minimize the effect of massive dollar evacuation. What I don't get is why, if the eventual plan was say, a 40% appreciation, would anybody wait? BTW, even though there is no futures market in the yuan to guide us in this process (before it actually begins), I notice that quite a few Chinese ADR's have really gone into overdrive.