Ford posts $123 million loss
07-20-2006, 08:48 AM
#1
Senior Member
Thread Starter
Join Date: Aug 2002
Location: CA
Posts: 3,181
Likes: 0
Received 0 Likes
on
0 Posts
Ford posts $123 million loss
why did this surprise anyone? sure, they're cutting costs left and right as part of their "way forward"... but despite all their work, you can't expect an immediate turn around.
http://today.reuters.com/business/ne...arnings_season
http://today.reuters.com/business/ne...arnings_season
Ford posts quarterly loss
Thu Jul 20, 2006 8:32am ET172
By Poornima Gupta
DETROIT (Reuters) - Ford Motor Co., which has been working to slash costs and stem market-share losses, on Thursday posted an unexpected second-quarter loss as sales of large sport utility vehicles slumped on higher U.S. gasoline prices and it took charges for employee buyouts.
The No. 2 U.S. automaker cut its third-quarter production target in North America, and Ford Chairman and Chief Executive Bill Ford Jr. said the company will accelerate its turnaround efforts.
"Within the next 60 days, we'll be in a position to discuss the additional actions we will be taking," he said in a statement.
Ford's restructuring program already includes closing 14 plants and cutting up to 30,000 factory jobs in North America.
Ford said it had a second-quarter net loss of $123 million, or 7 cents a share, compared with a profit of $946 million, or 47 cents a share, a year ago.
The net results included one-time costs of $486 million, or 17 cents a share, before taxes, related to buyouts in North America.
The loss from continuing operations was 3 cents a share, compared with Wall Street analysts' average expectations for a profit of 14 cents a share, as tracked by Reuters Estimates.
Revenues fell to $41.97 billion in the second quarter, down from $44.55 billion a year earlier as U.S. vehicle sales fell 7 percent in the quarter.
The results are seen underscoring the pressure on Ford's turnaround plan. The company, which lost $1.2 billion in the first quarter, cautioned last week that business conditions have become tougher over the past six months.
Some analysts had cautioned that Ford's current turnaround efforts, which hinge on job cuts and plant closings, were too slow-moving to have any real effect on financial results until at least 2007.
EARNINGS SLUMP AT FORD CREDIT
Ford has been hit hard by high gasoline prices that have caused consumers to shift away from sport utility vehicles and large trucks to smaller and less profitable cars -- an area of relative weakness for Ford.
The decline in sales prompted Ford to cut its third-quarter production target in North America, mostly on the truck side, by 5.6 percent to 670,000 vehicles.
The move will further weaken Ford's financial results as automakers book their profits when vehicles roll off the assembly line and not when they are sold off dealer lots.
Ford said earnings at its finance arm, which makes loans to buyers of its cars and trucks, fell 40 percent to $441 million, partly reflecting higher borrowing costs as its credit ratings have sunk into junk territory.
With Ford's North American auto business struggling, the company has relied on compensating profits from the financing arm. In 2005, profits at Ford Credit exceeded losses in its auto unit and helped the automaker remain profitable.
Ford said the pre-tax loss in the second quarter for its core automotive operations widened to $808 million, excluding special charges, compared with a loss of $245 million a year earlier
In North America, Ford's largest unit, it had a loss of $797 million, before taxes and excluding special items, compared with a loss of $907 million a year earlier.
The improvement reflects cost reductions in most areas of the business, partially offset by higher sales incentives, adverse currency exchange rates and the sales shift away from high-margin trucks, Ford said.
Thu Jul 20, 2006 8:32am ET172
By Poornima Gupta
DETROIT (Reuters) - Ford Motor Co., which has been working to slash costs and stem market-share losses, on Thursday posted an unexpected second-quarter loss as sales of large sport utility vehicles slumped on higher U.S. gasoline prices and it took charges for employee buyouts.
The No. 2 U.S. automaker cut its third-quarter production target in North America, and Ford Chairman and Chief Executive Bill Ford Jr. said the company will accelerate its turnaround efforts.
"Within the next 60 days, we'll be in a position to discuss the additional actions we will be taking," he said in a statement.
Ford's restructuring program already includes closing 14 plants and cutting up to 30,000 factory jobs in North America.
Ford said it had a second-quarter net loss of $123 million, or 7 cents a share, compared with a profit of $946 million, or 47 cents a share, a year ago.
The net results included one-time costs of $486 million, or 17 cents a share, before taxes, related to buyouts in North America.
The loss from continuing operations was 3 cents a share, compared with Wall Street analysts' average expectations for a profit of 14 cents a share, as tracked by Reuters Estimates.
Revenues fell to $41.97 billion in the second quarter, down from $44.55 billion a year earlier as U.S. vehicle sales fell 7 percent in the quarter.
The results are seen underscoring the pressure on Ford's turnaround plan. The company, which lost $1.2 billion in the first quarter, cautioned last week that business conditions have become tougher over the past six months.
Some analysts had cautioned that Ford's current turnaround efforts, which hinge on job cuts and plant closings, were too slow-moving to have any real effect on financial results until at least 2007.
EARNINGS SLUMP AT FORD CREDIT
Ford has been hit hard by high gasoline prices that have caused consumers to shift away from sport utility vehicles and large trucks to smaller and less profitable cars -- an area of relative weakness for Ford.
The decline in sales prompted Ford to cut its third-quarter production target in North America, mostly on the truck side, by 5.6 percent to 670,000 vehicles.
The move will further weaken Ford's financial results as automakers book their profits when vehicles roll off the assembly line and not when they are sold off dealer lots.
Ford said earnings at its finance arm, which makes loans to buyers of its cars and trucks, fell 40 percent to $441 million, partly reflecting higher borrowing costs as its credit ratings have sunk into junk territory.
With Ford's North American auto business struggling, the company has relied on compensating profits from the financing arm. In 2005, profits at Ford Credit exceeded losses in its auto unit and helped the automaker remain profitable.
Ford said the pre-tax loss in the second quarter for its core automotive operations widened to $808 million, excluding special charges, compared with a loss of $245 million a year earlier
In North America, Ford's largest unit, it had a loss of $797 million, before taxes and excluding special items, compared with a loss of $907 million a year earlier.
The improvement reflects cost reductions in most areas of the business, partially offset by higher sales incentives, adverse currency exchange rates and the sales shift away from high-margin trucks, Ford said.
