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Ford feeling almost ........ perky
Topic Started: Jul 23 2009, 05:34 AM (225 Views)
brenda
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..............
Debt reduction pushes Ford to $2.3B 2Q profit

By KIMBERLY S. JOHNSON and TOM KRISHER
AP Auto Writers

DEARBORN, Mich. (AP) -- Helped by a lightened debt load, Ford Motor Co. posted a surprise second-quarter profit of $2.8 billion Thursday, following the worst loss in company history a year earlier. Shares rose 10 percent.

The net profit ends a string of four straight quarterly losses for the nation's second-largest automaker, which has gained U.S. market share at the expense of crosstown rivals Chrysler Group LLC and General Motors Co., both of which spent time under bankruptcy court supervision. Ford last went into the black in the first quarter of 2008, with net profit of $70 million.

However, excluding its debt reduction and other items, Dearborn, Mich.-based Ford would have reported a quarterly loss, though smaller than Wall Street expected.

Chief Financial Officer Lewis Booth said the improved second-quarter results are a sign that the company's cost cuts and emphasis on new products are paying off. He stuck to Ford's earlier prediction that it would return to annual profitability in 2011.

"We're 18 months away, I guess," he told reporters on Thursday, adding that a full year of profitability hinges on improved auto sales in the U.S. and Europe.


Unlike GM and Chrysler, Ford avoided bankruptcy and government loans, mainly by borrowing or setting up credit lines totaling $23.5 billion in 2006 and 2007 to prepare for an economic downturn. Since then the company has cut costs and rolled out new vehicles, mitigating its sales decline in the worst auto sales market in more than a quarter-century.

Ford reported second-quarter net income of 69 cents a share, compared with a loss of $8.7 billion, or $3.89 a share, for the same quarter a year ago.

The profit came from a $3.4 billion accounting gain due to debt reduction. Earlier this year the company swapped stock and cash to reduce its loan and bond debt by $10.1 billion, cutting its interest payments by more than $500 million.

Ford also raised $1.6 billion by selling 345 million more shares during the quarter, and said it is likely to take further steps this year to lower debt and raise cash.

The company made $1.8 billion in structural cost cuts for the quarter, including 1,000 blue-collar job cuts through buyout and early retirement offers. Ford now has 47,300 factory workers, which it says is about the correct level.

But excluding special items, including the debt reduction, Ford would have lost $424 million, or 21 cents a share. Still, the results beat analysts' expectations of a per share loss of 50 cents on revenue of $24.7 billion. Excluding special items, the company lost just over $1 billion in the second quarter of last year.

Revenue totaled $27.2 billion, 40 percent less than a year earlier as the worldwide auto sales slump continued. Ford also had reduced revenue due to the sale of its Jaguar and Land Rover operations.

Ford spent $1 billion more in cash than it earned in the quarter, compared to $1.4 billion in the first quarter of 2009.

In its main market of North America, Ford reported a much smaller pretax loss of $851 million, down from a loss of $1.3 billion in the year-ago quarter.

Ford is predicting a modest improvement in U.S. sales next year to about 12.2 million light vehicles. Sales so far this year have run below an annual rate of 10 million. In the U.S., the Ford, Lincoln and Mercury brands gained two percentage points of market share, ending the quarter at 16.4 percent.

Ford's shares rose 64 cents, or 10 percent, to $7.02 in pre-market trading on Thursday.

The automaker also reached a new agreement with the United Auto Workers union to change how it will pay the $13.1 billion it owes to a health care trust. That trust will take over retiree medical costs starting in January.

Ford now will be able to pay up to $6.5 billion in company stock at market value, company spokesman Mark Truby said. An agreement reached earlier this year set the stock price at $2 to $2.20, but the share price has risen to $7.

He said the new deal would require the company to issue fewer shares, reducing dilution for existing shareholders.

The company and union are still talking about other aspects of the union contract, as the company seeks to be competitive with concessions the UAW granted GM and Chrysler.

“Weeds are flowers, too, once you get to know them.”
~A.A. Milne
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Mikhailoh
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If you want trouble, find yourself a redhead
Good news.
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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brenda
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..............
Nobody can claim this Chevy driver is partisan. I will celebrate Ford's success, too. :)
“Weeds are flowers, too, once you get to know them.”
~A.A. Milne
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Qaanaaq-Liaaq
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Senior Carp
I guess this means no more “Mercury Blues” at Ford? Ford was considering dropping the Mercury division.

Well if I had money
Tell you what I'd do
I'd go downtown and buy a Mercury or two
Crazy bout a Mercury
Lord I'm crazy bout a Mercury
I'm gonna buy me a Mercury
And cruise it up and down the road...
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brenda
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..............
I swear they play that song almost daily here on the local radio stations.
“Weeds are flowers, too, once you get to know them.”
~A.A. Milne
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Mikhailoh
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If you want trouble, find yourself a redhead
Great song. And the term is Merc'ry.
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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brenda
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..............
Or just Merc' will do around here.
“Weeds are flowers, too, once you get to know them.”
~A.A. Milne
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Kincaid
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HOLY CARP!!!
Also didn't hurt Ford to sell off Jaguar and Land Rover.

I still hope they euthanize Merc'ry. It will make the song and Ford even better.
Kincaid - disgusted Republican Partisan since 2006.
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1hp
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Fulla-Carp

I'm happy for Ford if it goes well, but I don't believe the report is as rosy as it sounds. They just diluted their stock by selling another 345 million odd shares? Plus, before all of the shenanigans started I looked at the numbers for Ford, GM and Chrysler and Ford had way more debt than the other 2. It looks like they are swapping debt for stock too. However I don't see anything about rosy sales being the reason for the turnaround. So I'm still worried that Ford could crash.
There are 10 kinds of people in this world, those that understand binary and................
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Copper
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Shortstop
brenda
Jul 23 2009, 06:49 AM
Or just Merc' will do around here.

I know some Brits that use Merc' to refer to Mercedes Benz.

Doesn't that sound ridiculous?
The Confederate soldier was peculiar in that he was ever ready to fight, but never ready to submit to the routine duty and discipline of the camp or the march. The soldiers were determined to be soldiers after their own notions, and do their duty, for the love of it, as they thought best. Carlton McCarthy
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Mikhailoh
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If you want trouble, find yourself a redhead
Yeah. But hell, they're Brits. What did you expect. even D'Oh left them behind. :D
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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CTPianotech
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Fulla-Carp
"Detroit hasn't felt real pride since George Bush went to Japan, and vomited on their auto executives."

--Hank Hill




(sorry, the tv's on next to me :nerd: )
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