Ford posts quarterly loss of $1.4 billion, hopes for better in 2011
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US automaker Ford posted losses of $1.4 billion dollars for the first quarter. Unlike GM and Chrysler, the group has not asked for public funds and hopes that restructuring measures will help to achieve "break-even or better" results by 2011.
AFP - Ford Motor Co. announced Friday it lost 1.4 billion dollars in the first quarter, and said its restructuring was on track to achieve "break-even or better" results by 2011.
The automaker, the only member of the Detroit Big Three, which includes Chrysler and General Motors, that has not received emergency government aid, said it has enough cash to keep its plans on track.
"Ford finished the first quarter with 21.3 billion dollars in automotive gross cash and reiterated that based on current planning assumptions it does not expect to seek a bridge loan from the US government," a company statement said.
"Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world," said Ford president and chief executive Alan Mulally.
"Despite the challenges, Ford made strong progress on our transformation plan by gaining share with strong new products, slowing operating-related cash outflows, reducing outstanding debt, lowering our structural costs and reaching new agreements with the UAW (United Auto Workers)."
Ford said it "remains on track to meet or beat its financial targets based on current planning assumptions, including the target for its overall and North American automotive pre-tax results to be breakeven or better in 2011, excluding special items."
For all of 2008, Ford posted a whopping loss of 14.57 billion dollars, as the auto market collapsed in the latter part of the year.
Ford's loss for the past quarter translated to 75 cents per share, not as bad as feared on Wall Street, where analysts were expecting a deficit of 1.23 dollars per share.
First quarter revenue, excluding special items, was 24.8 billion, down sharply from 39.2 billion a year due to lower sales volume and unfavorable exchange rates.
Ford, which took out a credit line of 23 billion dollars before the credit crunch worsened, has managed to avoid the fate of rivals General Motors and Chrysler, which are near bankruptcy even with US government aid.
"The financial picture at Ford shows how brilliant the move of new CEO Alan Mulally was when he essentially mortgaged the company," said Douglas McIntyre at 24/7 Wall Street. "He probably saved the company."
Ford, which shed its Jaguar and other international nameplates as part of its restructuring, said it has begun "discussions with interested parties regarding the sale of Volvo," the Swedish-based brand.
Ford said Volvo had an operating loss of 255 million dollars For the first quarter, and that the company would take an "impairment charge" of about 700 million dollars, reflecting the difference between the book value and estimated fair market value of Volvo.
Ford North America reported a pre-tax loss of 637 million dollars, wider than the loss of 45 million a year earlier as revenues fell sharply along with US sales.
Its European operations meanwhile swung to a loss of 550 million dollars, compared with a profit of 739 million a year ago as the economies in Europe worsened.
The Asia Pacific and Africa unit lost 96 million dollars after a profit of one million a year earlier.
Only the South American operations were profitable, earning 63 million dollars, down from 257 million last year.