Posted on 10/23/2006 3:53:10 PM PDT by Nice50BMG
DETROIT (Reuters) - Ford Motor Co. (F) on Monday posted a quarterly loss of $5.8 billion -- its largest loss in 14 years -- as slower truck sales, charges for job cuts and asset write-downs in its troubled North American operations and elsewhere took their toll on the No. 2 U.S. automaker.
Ford said it would restate results from 2001 through the second quarter and cautioned that operating results would weaken further in the current quarter.
Ford also said it was considering raising new funding secured by its automotive assets in order to protect its cash position as it pays the bill to close 16 plants and cut up to 45,000 jobs.
"These business results are clearly unacceptable," said Chief Executive Alan Mulally, who took over at Ford in early September.
Ford posted a net loss of $3.08 per share for the third quarter compared with a loss of $284 million, or 15 cents per share, a year earlier. That included a battery of charges that totaled $4.6 billion after taxes, or $2.46 per share.
Ford's loss from continuing operations was 62 cents per share, matching analysts' average forecast as tracked by Reuters Estimates.
Analysts have urged Mulally to consider further asset sales to protect Ford's cash position, and in his first post-earnings conference call with analysts some credited him with a more open approach to the company's turnaround.
"One of the things that's positive about Mulally coming in is that nothing is sacred and he is willing to take a fresh look," said Morningstar analyst John Novak.
Said Argus Research analyst Kevin Tynan: "Simply shrinking again is not necessarily the answer. Ford needs to become a company flexible enough to be profitable at lower production volumes on each line (and) on each platform."
REVENUE DOWN, CASH IN FOCUS
Revenue for the quarter was $36.7 billion, down $4.1 billion. Auto sales accounted for $32.6 billion of total revenue.
High gasoline prices have caused U.S. consumers to shift away from sport utility vehicles and pickup trucks, a segment that represents over 60 percent of Ford's current sales.
Ford ended the quarter with cash of $23.6 billion but said that total would drop near $20 billion by the end of the year as it restructures.
Fitch Ratings, which placed Ford's debt on watch for a downgrade on Monday, said the automaker needed to hold at least $15 billion in consolidated cash in order to avoid raising concern among suppliers and customers.
Chief Financial Officer Don Leclair said Ford was "exploring various financing strategies, including secured financing involving a substantial portion" of its automotive operations.
Ford is selling its British luxury brand Aston Martin. Leclair said the company is in the process of preparing a short list of bidders but does not expect to close a sale this year.
Mulally also said Ford is open to reviewing its other luxury brands -- leaving the door open to a potential sale of Jaguar, Volvo or Land Rover.
"I really think it's going to hinge on how the businesses are doing and can we make profitable growth businesses out of them with the action we have taken and additional actions that might be required," he said.
BUYOUTS ON THE TABLE
Ford is offering buyouts to all of its 75,000 unionized workers in a bid to reduce its factory work force by nearly half. The bulk of hourly workers taking buyouts to leave the company in the first and second quarter of 2007.
About 4,000 employees at former Visteon Corp. (VC) factories, now grouped under Automotive Component Holdings, have already accepted buyouts, the company said.
In the third quarter, Ford took pretax charges of $861 million for job cuts related to plant closings in North America, $259 million for job cuts elsewhere, and $437 million to pay out pensions earlier than planned .
Ford also took pretax charges of $2.2 billion to write down the value of North American assets and $1.6 billion for the impairment of Jaguar and Land Rover assets.
Ford Motor Credit's net profit fell to $262 million from $577 million a year earlier in part because of higher financing costs driven by the parent company's junk credit rating.
"The reduced profitability at Ford Motor Credit now shines a more intense light on the weakness of Ford's fundamental operation -- the automotive business," Tynan said.
Ford executives repeated that the company has no plans to sell its finance arm, although Leclair said the automaker would be open to partnerships in some markets.
Shares of Ford were down 14 cents or 1.8 percent to $7.87 in early afternoon trade on the New York Stock Exchange.
(Additional reporting by Jui Chakravorty and Kevin Krolicki )
I hope they get wise and drop the pro-gay agenda. I like Fords, but not buying any now.
Only marginally, but it's still stupid of Ford to use their company to ram leftwing politics down customers's throads.
I'd bet that that the AFA boycott accounts for less than 1% of the drop in sales and that less than 5% of Americans are aware of it. The real reason Ford is sinking is that decades of mediocre products have driven consumers away and little in the current lineup is good enough to woo people back from Japanese cars. Now that the SUV trend is slowing (and Japan is building big SUVs), Ford is in deep trouble. Things like the 500 won't cut it.
I feel sorry for the Boeing exec that left to become the CEO at Ford. He's taken on a huge mess that might never be fixed.
The incompetent Ford children still call the shots and have driven that company into the ground with their crappy leadership.
Amen.
Good. The sodomites at Ford are learning that their homosexual agenda isn't very profitable. They should have stayed in the business of building cars....not promoting perversion and abomination.
My husband owns a small service company, and we only have Ford trucks. We will be needing to buy one or two new ones per year for the next two or three years.
I emailed Ford, told them we were customers. I politely pointed out that they should be selling trucks, and staying out of people's personal sex lives. You wouldn't believe the nasty note we got back.
BYE FORD
Correction -- Henry Ford 1st would be spinning in his grave like a turbine.
I agree 100%.
Boycotts, in general, only hurt the people boycotting. I find it pointless anyhow, since it's hard to find a very large company that doesn't show support for the gay agenda, at some level or another.
Bull-owney! My husband is a car/truck salesman for Dodge. In the past 2 months he's sold 10 vehicles: Eight of them were SUVs, and the other two were Ram 1500 quad cabs.
it's hard to find a very large company that doesn't show support for the gay agenda, at some level or another.
Exxon-Mobil is one of the only Fortune 500 companies that does not have "sexual orientation" in its non-discrimination policy. The rest of corporate America has sold out to the homo-nazis.
Enjoy.
Henry Ford was(and the Ford Family still is) a Anti-Semitic elitist snob.
post it
And if people are unhappy with Fords support of the homosexual agenda, how should they express their dissatisfaction. What's your suggestion? Tell us exactly what we should do to effect them. Please be specific and detailed.
Nah! He's with his pen pal, Adolph!
Your husband's anecdote isn't indicative of the industry in general. 3 dollars a gallon gas prices had an easy to anticipate consequence:
"At Honda, sales of the Civic, one of the industry's most popular small cars, grew 37 percent from a year ago. Honda reported a 25 percent sales increase in the gasoline-electric hybrid version of the Civic. Sales of the hybrid Toyota Prius nearly doubled, to 8,193 for the month.
Chrysler's performance was helped by a 69 percent increase in sales of the Dodge Neon, a car that the automaker is phasing out and barely marketing. At GM, sales of the Chevrolet Malibu rose 25 percent while sales of the Korean-built Aveo subcompact car were up 25 percent.
At Ford, trucks and SUVs -- the backbone of the company's sales and profits -- struggled through September. Sales of F-Series pickup trucks plunged 30 percent. Sales of Ford's large SUVs, including the Ford Explorer and Expedition and the Lincoln Navigator, sank by more than 55 percent each. At GM, overall sales of trucks, minivans and SUVs dropped 30 percent. Truck, SUV and minivan sales also fell at Toyota and Honda, as well as at Chrysler."
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