Ford Motor Company (NYSE:F) will host a daylong conference for investment analysts on Wednesday, as executives seek to reassure wary investors that the Blue Oval remains on a positive course.
What this conference is about
Ford's Investor Day conference is an annual event. Typically, senior executives including CEO Mark Fields and CFO Bob Shanks review Ford's recent performance around the world, dig into the company's current initiatives and plans for the near future, and present the company's guidance for the coming year.
In the past, the sessions have been full of good news for investors. But this year's event might be a different story.
The big questions that Ford will be asked to address
Investors are clearly concerned about the Blue Oval. For starters, Ford's stock has had a rough ride in 2016.
While Ford continues to execute well, generally speaking, there are some real concerns. I expect Ford's leaders to dig into these in some detail.
- The U.S. new-car market has plateaued: Auto sales are cyclical, and it's widely believed that the U.S. new-car market has peaked. Ford is heavily dependent on the U.S. market for profits, but its sales here have slipped recently. How will Ford continue to generate strong margins in North America when growth is scarce and rivals start to boost discounts?
- Lowered guidance for 2016: Ford lowered its full-year 2016 profit guidance last week after disclosing that a big recall will take a $640 million bite out of third-quarter earnings.
- Ford's China stumbles: Ford appeared to have been caught off guard earlier this year by rising sales of lower-cost domestic Chinese vehicles, particularly in the compact crossover SUV segments. Ford's market share slipped and it surprised investors with a second-quarter loss in its Asia-Pacific region. Ford's sales in China were up in July and August, but investors will want to hear that Ford has fixed whatever went wrong and learned from the experience.
- The outlook on South American: Ford, like most of its rivals in the region, has posted big losses from South America over the last couple of years. Steep recessions in key markets like Brazil and Argentina have hit new-car sales hard, and pricing has come under heavy pressure. But during Ford's second-quarter earnings call, Shanks hinted that there might be reasons for optimism when looking ahead to 2017. I expect him to explain those reasons in detail.
What Ford will want to discuss
Of course, Fields and company will have their own list of things they want investors to know about Ford's current and future efforts.
- Future technology: Ford has made a slew of high-tech announcements in recent months. Mass-produced driverless cars by 2021, the purchase of a company that runs shuttle buses on crowd-source routes, big investments in Silicon Valley software consultant Pivotal and self-driving sensor maker Velodyne, and the creation of a new Ford subsidiary focused on "emerging mobility" have all made headlines this year. Expect Fields and company to talk at length about where all of this is going.
- An overview of Ford's product plan: Ford may give some hints about its near-term future product plans. It won't go into great detail, but it may seek to reassure investors that its product pipeline remains strong by offering some details about what's coming in the next few years.
- Business outlook: Ford will present its 2017 guidance. This might not be rosy, and Fields and Shanks will want to take time to put it into the best possible context.
The upshot: An important day for Ford investors
Only Wall Street analysts are invited to attend the conference in person. But your humble Fool will have a copy of Ford's presentation and will be able to listen in by phone. It's very possible that some of what Ford says (particularly its 2017 guidance) will have a near-instant impact on its stock price; if so, I'll have all the details to share with you.