Tic-tac-toe, investors want to know: Will dynastical automaker Ford (NYSE:F) make it three in a row for earnings misses when it reports its Q3 2006 numbers Monday morning?

What analysts say:

  • Buy, sell, or waffle? Pardon my drooling, please. Out of the 16 analysts following Ford, not one rates the stock a buy; ratings are split evenly between hold and sell. For those of us who love to buy when Wall Street won't, it doesn't get much better than this.
  • Revenues. On average, analysts predict a 7% quarterly sales slide to $32.4 billion .
  • Earnings. . and for losses to widen to $0.56 per share.

What management says:
Among "U.S. automakers" (a term that becomes less significant with each "U.S." plant built in China or Mexico, and each "Japanese" plant built in Texas or Kentucky), Ford had the best news to relate earlier this month. The firm was the only U.S. automaker to report a gain in September sales (up 5% on the back of 26% car sales growth, offset by a 5% decline in its more profitable trucks segment). That gain translated into 50 basis points' worth of additional market share in comparison to last year, as the company took a 17.3% share. In contrast, GM's (NYSE:GM) sales fell for the month, and it shed 120 basis points of market share to end the month at 24.8%.

Good news, no doubt, but consider the bad news as well. In September, Ford revised and accelerated its "Way Forward" plan for restructuring, advising investors that it will not pay a dividend in Q4 and does not expect its North American automotive operations to generate a profit before 2009. South America and Europe are still expected to turn a profit this year, while Asia, Africa, and the firm's luxury "Premier Automotive Group" are expected to keep losing money in 2006.

What management does:
With mainstream-press articles on Ford and its U.S. rivals appearing nearly every day, I see little reason to rehash the obvious. I'll let the numbers speak for themselves:

Margins %

3/05

6/05

9/05

12/05

3/06

6/06

Gross

9.0

8.2

7.7

8.2

6.2

5.7

Op.

2.3

1.4

0.8

1.2

(0.9)

(1.4)

Net

1.6

1.5

1.1

1.1

(0.2)

(0.9)
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
The reasons for Wall Street's pessimism are obvious. What's more, the company itself is painting a pretty bleak picture. Although its market-share gains in September were a welcome change from the norm, its September "Way Forward" press release promised a "low 16%" U.S. market share by the end of this year, and just a 14%-15% share "going forward."

The diminution of Ford's prestige aside, reduced market share will also make itself felt on the profit line, as the firm loses the advantages of its larger-scale operation. Investors can only hope that management makes up for the loss in efficiency by adhering to its promise to "focus on profitable retail share."

Competitors:

  • DaimlerChrysler (NYSE:DCX)
  • Honda (NYSE:HMC)
  • Nissan (NASDAQ:NSANY)
  • Toyota (NYSE:TM)

Like tragic plays and long, sad novels? Then you'll love:

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Fool contributorRich Smithdoes not own shares of any company named above. The Fool's disclosure policy has all the horsepower you need.