Ford likely to post loss for fourth quarter
By Bill Koenig From Shanghai Daily|
Jan 25 2007
FORD Motor Co probably will report a fourth-quarter loss today, capping its worst year ever.
The quarterly loss at the second-largest US automaker will be 95 US cents a share excluding some costs, according to the average of 13 analyst estimates compiled by Bloomberg News. That would translate to more than US$1.5 billion. A loss of just US$400 million would push Ford's deficit for the year past its record US$7.39 billion in 1992.
"It's going to look ugly," said Erich Merkle, an auto analyst at consulting firm IRN Inc in Grand Rapids, Michigan. The quarter was the first full one under new Chief Executive Officer Alan Mulally.
Ford's losses mounted as it spent to cut jobs amid an eight percent drop in US sales for the year, led by reduced demand for its F-Series pickup trucks and Explorer sport-utility vehicles. The Dearborn, Michigan-based auto maker slashed North American production 22 percent in the fourth quarter.
Cutting output hurts sales and profit because auto makers record revenue when they ship vehicles to dealers, and fixed costs continue even when assembly lines are down.
Ford reported a net loss of US$74 million, or four cents a share, in 2005's fourth quarter. Excluding some costs, the company had a fourth-quarter 2005 profit of US$285 million, or 15 cents, spokeswoman Becky Sanch said. For all of 2005, Ford posted net income of US$1.44 billion, or 77 cents.
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