Ford Earnings Summary
July 20, 2006Ford Swings to $123 Million Loss
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
July 20, 2006 9:07 a.m. (Link:
HERE)
Ford Motor Co. reported a net loss in the second quarter, due to the costs of shedding personnel as part of its restructuring plan, and as high gasoline prices sapped demand for its trucks and sport-utility vehicles. Revenue fell 5.8%.
The No. 2 U.S. auto maker posted a net loss of $123 million, or seven cents a share, compared with net income of $946 million, or 47 cents a share, recorded in the year-earlier period.
Analysts surveyed by Thomson First Call on average expected Ford to post a profit of 12 cents a share in the second quarter, on revenue of $39.7 billion.
Ford recorded total revenue of $41.97 billion, compared with $44.55 billion. In North America, where the company has been struggling to stem a steady loss of market share as sales of sport utility vehicles plunge amid rising fuel prices, revenue fell to $19.2 billion from $19.9 billion. Automotive revenue was $37.75 billion, down from $38.69 billion.
Ford's North American operations posted a pre-tax loss of $797 million, down from $907 million. The company said that the reduced loss is explained by cost reductions in most areas of its business.
"We've seen an improvement in North America results in the second quarter, but the external factors we face aren't going to get any easier," said Ford Chairman and Chief Executive Bill Ford. "Mark Fields [president of the Americas region] and his team have been working on plans to accelerate their efforts. Within the next 60 days, we'll be in a position to discuss the additional actions we will be taking."
Ford's second-quarter loss from continuing operations, excluding special items, was $48 million, or three cents a share. Special items related to layoffs and voluntary terminations initially accounted for in the first quarter and a pension benefit in Japan led to positive adjustments to earnings of five cents a share and eight cents a share, respectively. But those were offset by charges totaling 17 cents a share, associated with further employment reductions and pension curtailments.
Earlier this month, Ford said it would cut its quarterly dividend in half and reduce compensation for board members in reaction to stronger-than-expected "headwinds" in the auto industry.
The moves signaled Ford may have to act more aggressively than it expected in January when it laid out its "Way Forward" restructuring plan, which calls for the elimination of 30,000 jobs and closure of 14 plants by 2012.
In June, Mr. Ford said SUV sales had fallen off faster than planned because of high gasoline prices -- which hurts Ford because trucks and SUVs make up more than half of its sales. He added that prices of metals, plastic and other materials had also risen faster than anticipated.
Ford's North American auto operations had losses of $1.6 billion in 2005 and $457 million in the first quarter of 2006. As part of the Way Forward plan, the company said North America would return to profitability by 2008. Ford's turnaround plan is ahead of schedule on reducing headcount. The company anticipates 12,000 hourly workers will depart this year, largely through buyouts.
But its market share is down again this year and in June, its shares fell to a 52-week low of $6.17. Meanwhile, rival General Motors Corp., which faces similar declines in U.S. market share and reported a $10.6 billion loss last year, has made progress in reducing costs and its stock has rebounded.
7/20/2006 09:39:00 AM
SSG Has Merged. You Can Read All Of The Latest SSG Content By Clicking Here
0 Comments:
SSG is not a Financial Advisor. Read Disclosure: HERE
--------------------------------------------------------
