Ford's $380M 3Q Loss Better Than Expected
Ford Motor Co. posted a third-quarter loss of $380 million on Thursday, a vast improvement over its $5.2 billion loss a year earlier.
The latest results beat Wall Street expectations, and its shares rose almost 5 percent in pre-market trading.
But it was a worse performance than the $750 million profit Ford reported for its second quarter, its first profitable quarter in two years.
The overall net loss amounted to 19 cents per share for the July-September period in contrast to a loss of $2.79 per share in the third quarter of last year.
Much of the loss was attributed to $350 million in special items, including an offer to exchange preferred securities and personnel reduction costs in Europe and with its Premier Automotive Group.
The struggling automaker also reported a $1 billion pretax loss on its home turf, North America, but that was an improvement over the $2.1 billion it lost in the year-ago period.
Ford also said it expects to sell its Jaguar and Land Rover units early next year, and it said it has completed a review of Volvo and plans to improve its financial performance.
Without special items, the company lost $24 million, or 1 cent per share, for the quarter. That far surpassed Wall Street's expectations. Fifteen analysts polled by Thomson Financial expected the company to lose 46 cents per share excluding special items.
Its shares rose 40 cents, or 4.9 percent, to $8.64 in pre-market trading.
The company reported revenue of $41.1 billion for the quarter, up from $37.1 in the July through September period last year.
Ford also said it has shed 25,900 hourly workers and 10,600 salaried workers since the end of 2005 as part of its restructuring plan. The reductions came mainly from buyouts and early retirement offers and have exceeded the company's plan for 2008, Ford said.
"Today's announcement, revenue minus cost equals earnings - that's a wonderful word, earnings - shows that year over year, quarter after quarter, we're making tremendous progress on our goal to create a viable Ford," President and Chief Executive Alan Mulally told Jeff Gilbert of CBS radio station WWJ-AM. "That really is exciting for all of us."
Ford predicted it would have a small loss or break even for the full year excluding special items, with substantial year-over-year improvement in its fourth quarter results. But it still expects to lose money in the final quarter of the year on a pretax basis, mainly in North America.
"We are about right on the plan," Mulally said. "Our goal is to return to profitability by 2009, and to do that, we need to stabilize our market-share, with the addition of the new cars and the crossovers and the small utilities that complement our world leadership in big SUVs and trucks, and then continue to improve our quality and our productivity."
The company posted a net loss of $12.6 billion for the full year in 2006 and a $3.15 billion loss for the year excluding special items.
The report from Ford came a day after General Motors Corp. posted a $39 billion loss for the third quarter, one of the biggest quarterly losses ever in the U.S., as a charge involving unused tax credits ended a string of three profitable quarters for the nation's largest automaker.