Ford Beats Wall Street Expectations - Net Loss "Only" $282 Million

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DETROIT, April 26, 2007; Poornima Gupta writing for Reuters reported that Ford Motor Co. posted better-than-expected results on Thursday, helped by cost-cutting and improved results from its European and luxury vehicle operations, sending shares up 5 percent in early trading.

Ford, which is in the midst of closing 16 plants and cutting up to 45,000 jobs in North America, posted a net loss of $282 million, or 15 cents per share, compared with a loss of $1.4 billion, or 76 cents a share, a year earlier.

JP Morgan analyst Himanshu Patel said lower warranty costs bolstered Ford's North American results by about $400 million during the quarter and helped the automaker beat Wall Street expectations.

"The underlying upside was still quite impressive," he said in a note for clients.

The No. 2 U.S. automaker also raised its second-quarter North American production forecast by 5 percent, to 810,000 vehicles.

Ford's loss from continuing operations, excluding one-time items, was 9 cents per share. The average Wall Street forecast was a loss of 60 cents per share, according to Reuters Estimates.

First-quarter revenue totaled $43 billion, up from $40.8 billion a year earlier. Global auto revenue rose to $38.6 billion from $37 billion.

The company posted a record loss of $12.7 billion last year and has forecast its core North American operations will not be profitable until 2009.

Its margins have been squeezed by intense competition in the market for pickup trucks where it dominates and shifting consumer tastes away from profitable sport utility vehicles.

Ford's core automotive operations posted a loss of $225 million in the first quarter, before taxes and excluding special charges, while its financial services arm posted a profit of $294 million.

EUROPE, LUXURY BRANDS SHINE

In North America, Ford lost $614 million during the quarter, before taxes and excluding special items. Those losses were partly offset by cost savings of $500 million, including $400 million in North America.

Its U.S. sales fell 13 percent, and sales of its high-margin F-Series pickup slid 14 percent. Its U.S market share fell to 15.1 percent from 17.2 percent a year earlier.

Ford said it had cut 18,000 jobs in North America, bringing cumulative cost savings under its turnaround plan to $1.9 billion. The automaker has set a goal of cutting $5 billion in recurring costs.

Ford's European and luxury operations, dubbed the Premier Automotive Group, posted improved results in the first quarter on stronger volume and pricing.

Ford of Europe had pretax profit of $219 million, while Premier posted record pretax profit of $402 million.

During the quarter, Ford reached an agreement to sell its British sports car unit, Aston Martin. It also sold one of the units of its former parts subsidiary, Visteon Corp., that it took back in a bailout deal, and clinched deals to sell two more of the struggling Visteon businesses.