March 29, 2024

Auto Sales, Led by Trucks, Jump in May

But in the world of the postbailout auto industry, that firmament has gradually shifted, as Ford has introduced appealing fuel-efficient models while G.M. has contracted, dropping brands and reducing capacity.

On Monday, Ford continued to chip away at its rival, reporting a robust 14 percent gain in American sales in May, to 246,000, about 6,000 behind G.M., which reported a tepid 3 percent gain. Chrysler reported an 11 percent sales increase, to more than 166,000, beating analyst expectations.

The strong performances by Ford and Chrysler helped the overall industry to stay on track to sell more than 15 million vehicles this year for the first time since 2007, before the financial collapse that sent carmakers into a tailspin. All automakers combined to sell 1.44 million new vehicles in the United States in May, an 8.2 percent gain over the same month in 2012.

“The industry is settling into a healthy place where supply and demand are meeting,” said Jessica Caldwell, an analyst with the auto research site Edmunds.com, “but demand is still growing. We’re edging our way into what would be the sweet spot for sales.”

Now demand is driving supply, with Ford, Chrysler and Toyota adding more production and more jobs at United States plants to capture sales momentum. On Monday, Ford announced plans to increase capacity by 10 percent, to 740,000 vehicles, in the third quarter, as it strives to meet increasing demand for its S.U.V.’s and midsize passenger cars.

Ford’s sales increase was driven not only by continued strong demand for large pickups and sport utility vehicles but also by rising sales of its smaller models, like the Fusion, Focus and Fiesta. Sales of the automaker’s Fusion midsize sedan, for example, rose 10 percent, to 29,553 vehicles, for its best May ever.

Ford also reported strong sales of its Escape utility vehicle, which also had its best month ever, and the Lincoln MKZ, which soared 42 percent for its best May on record.

G.M., by contrast, continues to struggle in some major passenger car categories even as other segments like trucks remain strong. Its passenger car sales slipped 6.4 percent, in part because of a 31.7 percent decline for its full-size Chevrolet Impala and a 36.1 percent drop for its Chevrolet Malibu midsize sedan. Its Buick LaCrosse, down 15.2 percent in May, and Regal, down 37 percent, also struggled.

In a sign of G.M.’s urgency, on Friday it unveiled a refreshed version of its Malibu, only a year after introducing a revamped model.

G.M., which sold 253,000 vehicles in May, did have success in its smaller cars, maintaining sales for its midsize Chevrolet Cruze while introducing the smaller Chevrolet Spark and Sonic models.

“It’s not necessarily saying G.M.’s performance was bad, because it wasn’t,” Ms. Caldwell of Edmunds.com said. “It was just that Ford was better. Ford has a balance in their portfolio, while G.M. is a little more hit or miss.”

The strongest sales across the industry remained in pickups and S.U.V.’s, which rose 10.9 percent to 718,890 vehicles in May, in contrast to a 5.7 percent increase in car sales, to 725,736 vehicles.

Sales of Ford’s F-Series rose 30.6 percent, while Chrysler’s Dodge Ram truck brand climbed 21.6 percent. At G.M., large pickup truck sales rose 23 percent, accompanied by a 25.3 percent gain for its Chevrolet Silverado truck, the country’s No. 2 best-selling vehicle with 43,283 units sold.

The 19.2 percent rise in pickup truck sales continues to reflect strong marketplace demand after a recovery in the housing market and a surge in the construction and oil industries. Automakers also cited an aging fleet of pickups and pent-up demand.

“Quite simply, it’s a great time to be in the truck business,” said Kurt McNeil, head of General Motors sales operations in the United States.

Several foreign automakers also reported double-digit sales increases, including a 24.7 percent gain for Nissan, driven by price cuts on seven of the Japanese automaker’s vehicles and the popularity of its Sentra and Altima models.

Mazda reported gains of 19.2 percent, and Subaru of 34.2 percent.

Toyota, the world’s largest automaker, lagged competitors with a 2.5 percent increase, in line with expectations.

For both Toyota and G.M., “the marketplace has become so competitive in their bread-and-butter segments,” said Alec Gutierrez, senior analyst at Kelley Blue Book.

Article source: http://www.nytimes.com/2013/06/04/business/auto-sales-led-by-trucks-jump-in-may.html?partner=rss&emc=rss

Drop in Jobless Claims Hints at Slow Recovery in Labor Market

Other reports on Thursday showed many top retailers had strong sales in January even as customers were hit with higher taxes, while productivity at businesses slumped in the fourth quarter.

Initial claims for state unemployment benefits dropped by 5,000 to a seasonally adjusted 366,000, the Labor Department said. That was enough to pull down a four-week moving average of new claims, a gauge of the trend in layoffs, by 2,250 to 350,500, its lowest since March 2008.

“The labor market is improving, but certainly not at a robust rate by any means,” said Russell Price, an economist at Ameriprise Financial.

While employers have pulled back on layoffs, they have added jobs only at a lackluster pace. Economists say the tepid recovery of the labor market means the Federal Reserve is likely to keep buying bonds into next year to keep borrowing costs low.

In a sign of the difficulty many people have in finding a job, the number of people still receiving benefits under regular state programs after an initial week of aid increased 8,000, to 3.22 million, in the week ended Jan. 26.

The economy has shown signs of underlying strength despite a surprise contraction in the fourth quarter.

Consumer spending has been looking stronger, and many retailers reported robust sales. Over all, sales at stores open more than a year rose 5 percent in January for 20 retailers, according to Thomson Reuters, pointing to some resilience in spending despite the increase in payroll taxes that hit most Americans last month.

The Commerce Department’s more comprehensive report on January retail sales, due on Feb. 13, is expected to show that sales edged higher from December when adjusted for seasonal swings.

Consumers are borrowing rather readily, a sign of confidence in the recovery. Consumer credit increased by $14.59 billion in December, the Federal Reserve said in a report.

The gains were driven by the biggest increase in nonrevolving credit, which includes student and auto loans, since November 2001.

Separately, the Labor Department said worker productivity outside the farming sector fell in the fourth quarter by the most in nearly two years as output increased only marginally despite steady gains in employment.

Productivity declined at a 2 percent annual rate, the sharpest drop since the first quarter of 2011 and a larger fall than the 1.3 percent forecast by economists in a Reuters poll.

Productivity is expected to rebound in the current period because analysts believe weak output during the fourth quarter was partly a result of temporary factors, like an unusually sharp decline in government spending on the military.

The drop in productivity combined with a big increase in hourly compensation to drive unit labor costs up at a sharp 4.5 percent rate in the fourth quarter.

Hourly compensation, which includes wages as well as employer contributions to social insurance and private benefit plans like health care, rose at a 2.4 percent rate.

Article source: http://www.nytimes.com/2013/02/08/business/economy/drop-in-jobless-claims-hints-at-slow-recovery-in-labor-market.html?partner=rss&emc=rss

ConAgra Raises Forecast as Earnings Exceed Expectations

ConAgra said last month that it would buy Ralcorp Holdings for $5 billion, to become the top American producer of private-label foods that stores brand as their own.

It said its full-year earnings forecast did not include any benefit from the purchase of Ralcorp. Consumer food brands ConAgra sells include Act II, Hebrew National, Marie Callender’s and Orville Redenbacher.

ConAgra has been increasing its presence in the private-label foods business, which often outpaces brand name food as consumer spending is squeezed by the lingering economic downturn.

This year ConAgra bought Odom’s Tennessee Pride, which makes breakfast sandwiches and sausage, and Kangaroo, which makes pita chips. It struck a deal in July to buy Unilever North America’s frozen meal business for $265 million.

ConAgra now predicts earnings of at least $2.06 a share for the 12 months ending May 13. It had forecast earnings of $2.03 to $2.06 a share for the period. Analysts on average were expecting $2.07 a share, according to Thomson Reuters.

The company, which is based in Omaha, predicted marketing investments would improve consumer food sales this year.

ConAgra’s profit rose to $211.6 million, or 51 cents a share, in the quarter ended Nov. 25, the company’s second fiscal quarter, from $180.2 million, or 43 cents a share, a year earlier.

Excluding items, the company earned 57 cents a share from continuing operations, topping Wall Street expectations by 2 cents.

“The results reflect the number of deals they have done over the past year,” said Erin Lash, a Morningstar analyst.

Sales rose 9 percent to $3.74 billion. Consumer foods sales rose 11 percent to contribute 64 percent to total revenue. Analysts on average had expected sales of $3.69 billion. Sales in the commercial foods business rose 5 percent, helped by strong sales at its Lamb Weston potato business outside the United States.

ConAgra’s shares closed at $30.16 on Thursday, up 0.7 percent, or 20 cents.

Article source: http://www.nytimes.com/2012/12/21/business/conagra-raises-forecast-as-earnings-exceed-expectations.html?partner=rss&emc=rss

Budget Talks and Retailers’ Discounts Drag Markets Down

The stock market mostly slipped on Monday, pulling back from last week’s gains in Thanksgiving-shortened trading, as retailers fell on concerns about heavy discounts at the start of the holiday shopping season and the overhang of federal budget negotiations kept investors wary of making big bets.

The Nasdaq composite index closed higher, led by gains in eBay and Apple. The Standard Poor’s 500-stock index cut most of its losses during Monday’s trading session and remained above its 200-day moving average, maintaining its long-term upward trend.

The S. P. 500 consumer discretionary index fell 0.5 percent after the start of the holiday shopping season over the four-day Thanksgiving weekend. Target, one of the largest retailers by market value, fell $1.71, or 2.6 percent, to $62.78.

“The concern is big retailers are discounting so much, sales look better, but at what cost?” said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets.

Bucking the retail trend, shares of eBay closed at their highest in almost eight years, rising $2.39, or 4.9 percent, to $51.40, as the online marketplace posted strong sales on Cyber Monday. Amazon gained $3.74, or 1.6 percent, to $243.62.

The White House showed little enthusiasm on Monday for a proposal to avoid the fiscal shock of tax increases and spending cuts to take effect at the first of the year by limiting tax deductions and loopholes, instead of allowing tax rates to rise for the richest Americans.

Investors are hoping for advances in Congressional talks over the more than $600 billion in spending cuts and tax increases that threaten to drag the American economy back into recession.

Indications of progress in talks, or just a political willingness to negotiate, contributed to the market’s recent rally. Major indexes last week gained 3 to 4 percent; the Dow Jones industrial average moved above 13,000 and the S.P. 500 above 1,400 for the first time since Nov. 6.

On Monday, the Dow industrials fell 42.31 points, or 0.33 percent, to 12,967.37. The S. P. 500 dropped 2.86 points, or 0.20 percent, to 1,406.29. The Nasdaq gained 9.93 points, or 0.33 percent, to 2,976.78.

Apple, a big mover in the Nasdaq, jumped $18.03, or 3.2 percent, to $589.53. The company said on Friday that it had asked a federal court to add six more products to its patent infringement lawsuit against Samsung Electronics, including the Samsung Galaxy Note II, the latest move in the continuing legal war between the two companies.

In the bond market, interest rates slipped. The price of the Treasury’s 10-year note rose 8/32, to 99 20/32, while its yield fell to 1.67 percent, from 1.69 percent on Friday.

Article source: http://www.nytimes.com/2012/11/27/business/daily-stock-market-activity.html?partner=rss&emc=rss

Nike Posts Strong Sales and Orders in Latest Quarter

Worldwide orders for the Nike brand, a closely watched measure of demand in coming months, grew 13 percent to 8.9 billion at the end of the quarter.

In China, orders scheduled for delivery from December 2011 through April 2012 rose 31 percent, with a 12 percent rise in other emerging markets.

In November, Nike’s rival Adidas raised its sales outlook on strong demand in emerging markets, and Puma said in October that China and Latin America contributed most to overall sales growth.

But for Nike, orders rose 16 percent even in North America, and were up in all other markets except Japan.

“The brand continues to show very strong demand,” said Matt Arnold, consumer discretionary analyst for Edward Jones. “The strength is just impressive, helping propel the stock higher.” The company said margins dropped 2.6 percentage points as costs of labor and raw materials rose, but came in more or less in line with what most analysts had expected.

“Margins were pretty consistent with what we were looking for. Any time you see a brand that is witnessing this type of demand, it gives you confidence that, over time, pricing will be able to catch up with input costs and labor costs,” Mr. Arnold said.

For the quarter ended Nov. 30, the second of Nike’s fiscal year, it earned $469 million, or $1 a share, a rise of 3 percent over the year-ago quarter. Analysts, on average, were expecting earnings of 97 cents a share, according to Thomson Reuters.

Revenue rose 18 percent to $5.73 billion.

Excluding foreign exchange fluctuations, revenue for the Nike brand rose 18 percent. The company, which also owns the Converse, Cole Haan, Umbro and Hurley brands, said revenue from these segments increased 5 percent. Nike shares were up 2.4 percent at $96.07 in after-market trade on Tuesday, after closing at $93.63.

Article source: http://feeds.nytimes.com/click.phdo?i=35861ab0062d7655d008855abefb57db