Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The Big Three's Mixed Bag for 2005

For the Big Three, 2005 was a down sales year for two out of three -- and the biggest two at that.

General Motors (NYSE: GM  ) reported that 2005 unit sales fell 4% -- with cars off 7% and trucks declining 2%. The good news could be summed up by this quote: "We're thrilled that consumers voted with their pocketbook and made Chevrolet the number one U.S. brand in 2005." Chevy is back on top for the first time since 1986 after introducing four new entry-level vehicles. But GM's overall results were anything but thrilling.

Ford (NYSE: F  ) used its press release headline to announce its first increase in car sales since 1999. The increase in units sold, though, was a less-than-impressive 2%. The bad news was that total vehicles sales decreased by 4.9% compared to last year. Trucks, two-thirds of the total units sold, deflated a sharp 8%. Some of the bigger model sales declines were in sports utility vehicles like the Ford Explorer and the Lincoln Navigator, which, respectively, reported 29.3% and 29% drops.

The news at DaimlerChrysler (NYSE: DCX  ) was far rosier, with a 4% increase in 2005 U.S. sales of passenger vehicles. Mercedes-Benz (8.9% of total units sold) reported December sales were the highest monthly total ever in the U.S. (up 17%), and 2005 was the twelfth consecutive year of sales gains -- although the 2005 gain was a meager 1%.

Chrysler continued to build on a successful 2004, when a record nine new models were introduced. Although the new model introductions slowed in 2005, sales didn't. They increased a strong 5%.

General Motors has already announced its restructuring plan, which includes health care cost reductions. Analysts expect it to report modest earnings of $1.06 a share in 2006. At 18.2 times forward earnings, earnings-challenged GM is hardly what I'd call value priced, given the relative uncertainty surrounding its outlook.

The outlook ahead is cloudy for Ford. Its Jan. 23 announcement of a restructuring plan is expected to include plant closings and layoffs. Ford's president for its operations in the Americas stated today that the 2006 sales outlook will probably not outshine 2005. Analysts agree. They expect Ford to report a decline in 2006 earnings.

DaimlerChrysler expects to introduce a record number of new models next year. That should help the company post the $4.23 a share in earnings analysts expect (up from a projected $3.34 this year). At 12.6 times forward earnings, the company is priced below the 14.5 times Toyota (NYSE: TM  ) commands and above the 11.1 times Honda (NYSE: HMC  ) garners. And I'd say the premium to Honda is justified, as analysts expect Honda to grow earnings 5% a year for the next five years, while Daimler's growth forecast is 6.1%.

Are you looking for the best investments on Wall Street? Motley Fool founders David and Tom Gardner recommend two for your consideration every month in theMotley Fool Stock Advisornewsletter. Try a satisfaction-guaranteed subscription today.

We're down to the wire with our annual Foolanthropy drive. From now through Jan. 6, please open your hearts and wallets to help our five Foolish charities.

Fool contributor W.D. Crotty does not own any shares in the companies mentioned. Clickhereto see The Motley Fool's disclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 510023, ~/Articles/ArticleHandler.aspx, 10/22/2016 2:34:32 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 17 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/27/2010 2:42 PM
DCX.DL $9.70 Down +0.00 +0.00%
F $12.02 Up +0.05 +0.42%
Ford CAPS Rating: ****
GM $32.04 Up +0.29 +0.91%
General Motors CAPS Rating: ***
HMC $29.79 Up +0.12 +0.40%
Honda Motor CAPS Rating: ****
TM $115.27 Down -0.87 -0.75%
Toyota Motor CAPS Rating: ***