'It's bad': Ford posts loss
By Bill Koenig From Shanghai Daily|
Jan 26 2007
FORD Motor Co's fourth-quarter loss widened to US$5.76 billion on a cut in North American output, pushing the 103-year-old US auto maker to its worst year ever, Bloomberg News reported.
The loss was US$3.05 a share, compared with US$74 million, or four US cents, a year earlier, Ford said yesterday in a statement. Excluding costs Ford considers one-time items, the loss was US$2.08 billion, or US$1.10 a share, higher than analysts' estimates. Ford, the second-largest US auto maker, said it expects its losses will narrow this year.
"We knew it was going to be bad," Pete Hastings, an analyst at Morgan Keegan & Co in Memphis, Tennessee, said before the results were released. "They told us it would be bad. It's bad."
Ford's full-year loss reached US$12.75 billion, exceeding the previous record of US$7.39 billion in 1992. Michigan-based Ford had net income of US$1.44 billion in 2005 and hasn't been profitable since the second quarter of that year amid falling sales of pickup trucks and sport-utility vehicles.
Analysts expected a quarterly loss of 95 US cents a share, excluding some costs, the average of 13 estimates compiled by Bloomberg.
Contributing to the loss was a 24 percent production cut in North America, Ford's biggest market. The company is building fewer autos in response to 11 consecutive years of declining US market share, most of it shed to Toyota Motor Corp. Lower output hurts profit because auto makers record revenue when they ship vehicles to dealers.
Shares of Ford fell 30 US cents to US$7.90 at 7:14am, before the start of regular New York Stock Exchange composite trading. The stock has declined 43 percent over the past five years.
Chief Executive Officer Alan Mulally, 61, a former Boeing Co executive recruited to Ford in September, wants to revive the company by shedding jobs and investing in new models.
"We fully recognize our business reality and are dealing with it," Mulally said in the statement.
Mulally also hopes to wean Ford from dependence on pickups and SUVs, which accounted for 62 percent of 2006 US sales. Full-year sales fell eight percent as higher gasoline prices damped demand for vehicles such as F-Series pickups and Explorer SUVs.
Ford said that one-time costs "are expected to be significantly lower than in 2006." The statement said Ford expects a lower loss this year but didn't provide an estimate.
Ford doesn't expect its North American operations, the main reason for losses, to be profitable until 2009. The auto maker borrowed US$23.4 billion last month to withstand a US$17 billion cash drain over the next three years.
Job-cutting efforts continued last quarter as the company finished completed buyout offers of as much as US$140,000 to all of its US factory workers. About 30,000 accepted in addition to 8,000 who agreed to buyouts earlier last year.
At the start of this year, Ford had about 83,000 employees represented by the United Auto Workers.
Ford said in mid-September it was accelerating job cuts and plant closings.
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