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Here are highlights from Monday’s Analyst Blog:
Ford Selling More Cars in China
Ford Motor Co. (NYSE: F) has revealed that its sales in China grew 35% during November, surpassing its 24.3% sales growth in the U.S. The automaker sold 56,829 vehicles during the month in China compared with 147,338 vehicles in the U.S. Meanwhile, Ford’s sales soared 39% to 525,100 vehicles in the first 11 months of the year.
Ford’s sales in China were boosted by its midsized car lineups, including Fiesta and Focus. Sales of Focus went up 34% to 17,139 units in November while sales of Fiesta surged 60% during the first 11 months of the year.
Changan Ford Mazda Automobile, Ford’s passenger vehicle joint venture in China, posted a 31% gain in sales during the first 11 months of 2010. On the other hand, sales at Jiangling Motors Corporation – the automaker’s commercial vehicle venture in the country – shot up 59% during the same period.
The Chinese auto industry being the apple of Beijing’s eye is being further boosted by government incentives that coax car owners to shift to more environment-friendly and fuel-efficient cars and minivans. While the domestic automakers (especially small car manufacturers) received most of the incentives, foreign automakers including Ford and General Motors (NYSE: GM), benefited from them as well.
Ford’s hometown rival, GM, posted an 11% gain in sales to 196,990 vehicles, driven by strong demand for its Buick and Chevrolet lineups. In the first 11 months of the year, the automaker’s sales appreciated 32.7% on a year-over-year basis.
American Tower to Outperform
We upgrade our recommendation for American Tower Corp. (NYSE: AMT) to Outperform based on our assessment that surging demand for wireless data and video in the developed markets couple with diversification into several emerging markets will significantly boost the company’s long-term growth. The company continues to perform strongly driven by substantial demand for tower space to facilitate high-speed wireless data and video services, together with emerging 3G/4G technologies.
American Tower is going through a healthy leasing environment as wireless carriers are gradually upgrading their networks. Rental & Management revenue, adjusted EBITDA, and free cash flow financial metrics remain favorable. Our long-term view regarding the tower industry is positive supported by a spurt of demand for smartphones and other mobile devices throughout the world. Management has also raised its full year 2010 financial outlook.
Mobile subscriber growth has significantly expanded the wireless tower industry. Future financials are likely to be propelled by strong demand for wireless voice, broadband wireless data and video networks, which require more tower space. Deployments of 3G mobile networks promulgate requirements to expand coverage and infrastructure by carriers.
Emerging 4G WiMAX and LTE networks will also create impressive demand for tower leasing. Verizon Wireless (NYSE: VZ) will start deploying LTE from the end of 2010. AT&T (NYSE: T) will follow suit from mid-2011.
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