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Ford reveals: 4th quarter 2008 losses of $5.9b…

January 30, 2009

Ford has so far been able to avoid suckling on the teat of the federal
government like its cross-town rivals, but after today’s announcement
of a 2008 fourth-quarter loss of $5.9 billion, serious questions are
beginning to arise about how FoMoCo will fair in 2009.

Ford logo

This will be the third consecutive year Ford hasn’t posted a profit, with a $2.8 billion loss in the previous year and $620 million drop during the same
quarter of 2007. Ford wrapped up 2008 with $13.4 billion in cash
reserves, but has announced plans to draw $10.1 billion in available
credit to weather what’s sure to be a rough 2009. That would bring
Ford’s liquidity up to $23.5 billion, sans the money already used for
January, and the automaker contends that this is enough to meet its
goals for the year. However, if Ford continues its fourth-quarter cash
burn rate of $1.83 billion a month, there’s a distinct possibility that
FoMoCo execs might be knocking on Uncle Sam’s door before the year
comes to a close.

On a more positive note, Ford posted a 2008
pre-tax profit of $1.06 billion in Europe, although the last quarter
saw a drop of $330 million.

Source: Autoblog

PRESS RELEASE

FORD REPORTS 4TH QUARTER 2008 NET LOSS OF $5.9 BILLION; GAINED MARKET SHARE IN U.S., EUROPE, ACHIEVED COST TARGET

  • Net loss of $5.9 billion, or $2.46 per share, for the
    fourth quarter of 2008 amid a sharp global decline in vehicle demand;
    pre-tax loss of $3.7 billion from continuing operations, excluding
    special items. ++
  • Reduced Automotive costs by
    $1.4 billion in fourth quarter and $4.4 billion in 2008 versus year-ago
    levels. Achieved $5.1 billion in North America cost reductions at
    year-end 2008 compared with 2005, excluding favorable impact of
    depreciation and amortization from asset impairment at the end of the
    second quarter.
  • Decisively reduced global
    dealer stocks by more than 50,000 vehicles compared with the third
    quarter. Ford now has among the lowest days’ supply in the industry.
  • Product
    transformation continues to gain strength, helping the company to gain
    market share in Europe for fourth quarter and full year, and in the
    U.S. in the fourth quarter.
  • Total liquidity of $24 billion, including Automotive gross cash of $13.4 billion, at Dec. 31, 2008. +++
  • Ford
    is drawing its available credit lines due to concerns about the
    instability of the capital markets with the uncertain state of the
    economy. The $10.1 billion will be added to company cash for the first
    quarter 2009.
  • The United Auto Workers union has
    agreed to end the “jobs bank” at Ford. The company and the union are
    presently working out the details of implementation.
  • Based
    on current planning assumptions, Ford has sufficient Automotive
    liquidity to fund its business plan and product investments and does
    not need a bridge loan from the U.S. government.
  • Ford
    remains on track for both its overall and its North American Automotive
    pre-tax results to be at or above breakeven in 2011, excluding special
    items.
Financial Results Summary

Fourth Quarter

Full Year

2008

O/(U) 2007

2008

O/(U) 2007

Wholesales (000) ++

1,138

(505)

5,404

(1,149)

Revenue (Bils.) ++

$ 29.2

$ (16.3)

$ 139.3

$ (34.6)

Continuing Operations ++
Automotive Results (Mils.)

$ 3,279)

$ 2,390)

$ (6,203)

$ (5,105)

Financial Services (Mils.) (384) (653) ( 495) (1,719)
Pre-Tax Results (Mils.)

$ (3,663)

$ 3,043)

$ (6,698 )

$ 6,824)

After-Tax Results (Mils.) $ (3,273) $ 2,786) $ (7,119) $ 6,695)
Earnings Per Share ++++

$ (1.37)

$ (1.14)

$ (3.13)

$ (2.92)

Special Items Pre-Tax (Mils.)

$ (1,386)

$ 2,466

$ (7,605)

$ (3,733)

Net Income
After-Tax Results (Mils.)

$ (5,875)

$ (3,064)

$ (14,571)

$ (11,848 )

Earnings Per Share

$ (2.46)

$ (1.13)

$ (6.41)

$ (5.03)

Automotive Gross Cash (Bils.) +++

$ 13.4

$ (21.2)

$ 13.4

$ (21.2)

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