Well, Steve, Merrill Lynch thinks Ford won't be affected very much. As you said, they're expecting only a 5 cent hit on earnings per share because of the 11 day plant closings. That's not quite 10% of forecast. I know, the story on the news wire put the expected earnings at 93 cents and that would be only a little more than 5%. But 93 cents is for the quarter ending in December, the September expected quarter earnings are 59 cents and that's the quarter affected for now.
I think it all depends on how many people have lost confidence in Ford and how long it'll take for Ford to regain the publics confidence. I read of one survey saying that 25% of prospective Explorer buyers have changed their mind. That's a big hit. So far the stock has not been affected very much. If you look at the charts and you see that big drop of about $20 a couple weeks ago, that was a special cash dividend that was paid in some hokey rearrangement of the shares that allowed the Ford family holdings to sell a whole bunch of shares and still retain a voting majority. It had nothing to do with the recall.
I personally think that Ford is going to take bigger hit than just 5 cents in the current quarter and more in the future.
I've been looking at Ford every now and then, but every time when I think maybe the time is right, something comes up to change my mind. Who knows how much of an effect the Excursion problems are going to have.
But then, if I would be good at guessing what Wall Street is going to do, I would be a whole lot wealthier.
the short answer is: I currently don't own any Ford shares and I'm not buying here.
