Boeing, GM, Fiat Shares Plunge As Trade War Blowback Crushes Outlooks

While both careful not to specifically cite the politically unwise 'tariffs', Boeing, GM, and Fiat Chrysler stocks are plunging in the pre-market after trade war-related impacts caused missed earnings or lowered outlooks.

General Motors Co. cut its forecast for profit this year as surging prices for steel and aluminum combine with swings in South American currencies to burden the largest U.S. automaker. Specifically, Bloomberg reports that raw material costs probably will be a $1 billion headwind to GM’s profit this year - roughly double its previous expectation - while the Argentine peso and Brazilian real are likely to drag on results through the remainder of 2018.

Fiat Chrysler Automobiles NV cut its financial targets after disappointing sales in China took a toll on second-quarter results (and the sad news of the death of former CEO Sergio Marchionne). Specifically, as Bloomberg reports, the Italian-American automaker lowered its guidance for revenue and profit this year, and said higher competition and slumping sport utility vehicles sales in China had hurt revenue.

It's a bloodbath - GM is down around 5% and Fiat Chrysler around 11%...

The rest of the auto space is also under pressure with Daimler -3%, Ferrari -2.9%, Volkswagen -2.5%.

It's not just autos, however, as Boeing reported a $418 million blow from additional costs as it prepares to deliver the first of its delay-plagued aerial tankers to the U.S. Air Force, rattling investors accustomed to smooth sailing from the world’s largest planemaker. Boeing's core EPS guidance missed its midpoint and the stock is reeling.

As Bloomberg notes, Boeing's recent the ascent has slowed in recent months as tariffs imposed by President Donald Trump have fueled trade tensions and threatened to dent Boeing’s order book. “Trade and tariff risks have kept sentiment on BA stock recently in check,” Canaccord Genuity analyst Ken Herbert said in a report Tuesday, referring to Boeing by its stock ticker.

And as Boeing falls, it is weighing on The Dow...

Time for another bailout from Washington?

 

 

 

 

 

Comments

just the tip Free This Wed, 07/25/2018 - 09:51 Permalink

the reason is pretty simple.  no one else makes a 737/777/787, or a 318/319/320/321/350.  those embraer and bombardier just don't have the capacity.  the C series has the range but is a commuter airplane with range, not capacity.

the russian MC21 and chinese C919 don't have air worthiness certificates.

who 'ya gonna buy from, if not boring or airbut?

the prices of aircraft go up.  airfares go up.  same with jet fuel.

In reply to by Free This

Vendetta Free This Wed, 07/25/2018 - 11:52 Permalink

Yes ... they are lying... as usual ... it’s a monetary manipulation thing to try to generate more hatred for trump 

take a look at Boeing stock over the last 10 years ... notice the huge jump from $75 dollar area ... the jump happened long after they were shipping 787s after certification 

In reply to by Free This

Endgame Napoleon Justin Case Wed, 07/25/2018 - 08:06 Permalink

I have talked to people who worked the temp jobs at the local auto plants. This was about 6 or 7 years ago. 

  • One got paid $15 per hour.
  • Another got paid $17 per hour. 

I did see an ad recently, indicating that they have raised the pay significantly for the young temporary workers that they hire to do the work that the older union workers can no longer do. 

Again, these are temp jobs with strict quotas. Those young temps work their cans off.  

In reply to by Justin Case

valjoux7750 TheSilentMajority Wed, 07/25/2018 - 08:59 Permalink

Poorly engineered my ass. I drive an 09 Pontiac g8 GT with 134k miles on it. No issues other than an alternator, replaced myself for under 200.00. No sqeeks or rattles either. And being that it has a 6.0 V8 (400hp, 365hp stock) it will blow the doors of most cars on the road. So fuck your antiquated opinion. GM makes good cars if you know what to buy! 

Of course it was built by GM Australia.

In reply to by TheSilentMajority

just the tip TheSilentMajority Wed, 07/25/2018 - 10:04 Permalink

Airbus predicts 33,000 commercial aircraft will be required, while Boeing’s crystal ball suggests a market of nearly 40,000 new commercial aircraft — valued at, Airbus reckons, US$5.2 trillion, while Boeing estimates US$5.9 trillion — over the next 20 years, the airframers said at the 2016 Farnborough Air Show on Monday (European time).

http://australianaviation.com.au/2016/07/airbus-boeing-forecast-33-4000…

rounding the numbers, looking out 15 years for 40K planes, that comes out to about 7.3 planes a day.  setting aside what 0.3 of a plane looks like, or would sell for, currently boring squirts out two 737 every three days.

i would say they need to add another "line" or two, or three.

re-engining aircraft just is not going to keep up with demand.

In reply to by TheSilentMajority

Endgame Napoleon Occams_Razor_Trader Wed, 07/25/2018 - 08:00 Permalink

With their mostly $10-to-$12-per-hour temp & gig jobs, Americans cannot afford to buy cars, anyway, not without the fancy zero-down / rent-to-own financing. Bailed-out US-owned automakers make most of their wares in China & Mexico, albeit they do employ groups of young, American temporary workers at busier times, paying them less than they pay the handful of union workers with seniority, but much more than most office jobs pay college grads. There is a six-month-long waiting list for some of those temp jobs. 

In reply to by Occams_Razor_Trader

BandGap Wed, 07/25/2018 - 07:37 Permalink

Smell the desperation.

Maybe Government Motors will start making good cars again and Americans will buy them. Just a thought.

Fiat is a joke, even in the EU.

 

Last of the Mi… Occams_Razor_Trader Wed, 07/25/2018 - 09:22 Permalink

Go to some city in Europe and count the chevrolets and fords. Their own tariff's destroyed that market decades ago and now we're the bad asses for attempting to level the field? 

Tariffs are taxes, nothing more and they reduce trade in unpredictable ways that always come back to bite you on the butt. That said something has to be done to kill the imbalance that Europe has created. 

 

In reply to by Occams_Razor_Trader

buzzsaw99 Wed, 07/25/2018 - 07:40 Permalink

GM, which makes more cars in a month than TSLA makes in a year and yet has a similar market cap responds negatively to negative news as if we had a real market?  Interesting.

roddy6667 Justin Case Wed, 07/25/2018 - 08:46 Permalink

An auto assembly job in China is a good job, much like Detroit had back in its glory days. The Chinese workers get good working conditions, job security, health insurance, a pension, and make enough to own a home. He has a good upper blue collar life with lots of consumer goods, vacations, dining out, Everybody in China that has a baby gets 5 months paid maternity leave with health insurance. The average Chinese citizen saves 36% of his pay for the future. What would Detroit have to pay a worker to match that? What would a car cost? Who could afford to buy one?

In reply to by Justin Case

silverer ToSoft4Truth Wed, 07/25/2018 - 08:31 Permalink

It would be better to shut down the GM plants, sell all assets, and simply pay the workers out through retirement. The cost would be far, far lower. The drain on the environment would be less, and CO2 emissions would be reduced. (I think that's silly, but that would make the liberals happy. CO2 is about 370 PPM, but in earth's geological past it was as high or higher than 8000 PPM, but go ahead, make the libs happy and shut it all down).

In reply to by ToSoft4Truth