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Ford Ends Year on Solid Note, While Caterpillar's Struggles Will Continue in 2014

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is 20 points up just before 3 p.m. EST after pending home sales rose 0.2% last month -- 1.6% below last November's levels. Mortgage rates have risen by more than a full percentage point since last May to nearly 4.5%, which has slowed housing sales toward the end of this year. However, the small increase was a welcome change compared to the previous five months of declines. As the market searches for its trading direction this afternoon here are some industrial companies making headlines.

One of Ford's many new designs in 2014 will be the 2015 Mustang. Photo credit: Ford.

Ford (NYSE: F  ) watched its stock price take a hit recently after the automaker released its guidance for 2014, which is likely to produce lower earnings compared to this year. In reality though, Ford's business remains strong and the lower earnings is due to launching or drastically refreshing 23 vehicles globally. That's a substantial increase in costly vehicle launches compared to this year's 11 new rollouts.

Ford announced today it expects to sell more than 2.4 million vehicles in the U.S. market this year, widening its lead over Toyota. In 2012, the Ford brand outsold Toyota by nearly 330,000 vehicles; that figure is estimated to have ballooned to nearly 400,000 vehicles this year.

In addition, Ford is also posting impressive retail sales gains. Through November Ford's retail sales increased by 15%, which made 2013 its best retail sales performance in six years. Furthermore, Ford's passenger car retail sales will surpass 600,000 vehicles for its highest volume year since 2000. It's clear domestic automakers are now producing more valuable cars, which is a night and day change from the days when Ford and General Motors were known to only produce quality trucks.

Another industrial giant is closing 2013 on a much different note than Ford. Caterpillar (NYSE: CAT  ) watched sales drop $11 billion and earnings plunge 44% year over year. Sadly, turning the page to 2014 may not bring anything much better for the company's performance.

"The third quarter was hideous, the fourth quarter will stink, and the guidance for 2014 is very, very subdued," said Brian Langenberg of the Langenberg research firm, according to IBTimes.

Caterpillar has indicated it doesn't expect much improvement in market conditions next year and that it may continue to slash more than the already eliminated 13,000 jobs. Weakness across the industry is likely to keep demand for Caterpillar's heavy machines down until 2015. 

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Related Tickers

8/30/2016 4:38 PM
^DJI $18454.30 Down -48.69 -0.26%
CAT $82.48 Down -0.62 -0.75%
Caterpillar CAPS Rating: ***
F $12.55 Up +0.08 +0.64%
Ford CAPS Rating: ****