Semi OT: Ford Makes A Profit!!!

I don't know what to make of this but Ford made a profit in the second quarter of this year. They earned $0.31 per share when the analysts expected them to lose $0.35 per share. Also, Ford improved market share by 0.5% from the first quarter to the second. Maybe they can turn things around. Here's the article:

AP Ford Posts $750M 2Q Profit Thursday July 26, 9:32 am ET By Tom Krisher, AP Auto Writer Ford Surprises Wall Street With $750M Second-Quarter Earning, First Profit in 2 Years

DEARBORN, Mich. (AP) -- Ford Motor Co. surprised Wall Street Thursday with second-quarter earnings of $750 million, its first profitable quarter in two years.

The company also confirmed it is exploring the sale of its Jaguar and Land Rover subsidiaries and said its U.S. market share rose during the quarter.

The profit of 31 cents per share compares with a net loss of $317 million, or 17 cents per share, in the same quarter of last year.

The company attributed the gains to significant year-over-year improvement in all of its automotive operations, and to cost reductions

-- including job cuts -- due to restructuring and positive special items that totaled $443 million. That includes a $206 million gain related to sale of its Aston Martin unit. Even its struggling North American division showed progress.

Ford has shed 27,000 hourly and about 10,000 salaried jobs since September 2006 through early retirement and buyout offers as it tries to shrink itself to match lower demand for its cars and trucks.

The positive earnings, though, surprised 15 analysts polled by Thomson Financial who expected the company to lose 35 cents per share excluding special items.

Ford shares gained 14 cents, or about 1.8 percent, to $8.11 in early trading Thursday after the earnings news.

Ford said it is exploring the potential sale of Jaguar and Land Rover based on discussions with parties that have expressed interest in the British units. And the company said it is conducting a strategic review of Volvo "that likely will conclude prior to year end."

Despite the quarterly earnings, the company said it still doesn't expect to post an annual profit until 2009, although it is burning cash at a slower rate than the $17 billion through 2009 that the company had predicted.

Even without the positive special items, the company still made money in the quarter, posting a profit of $258 million, or 13 cents per share. That compares with a loss of $118 million, or 6 cents per share, in the year-ago quarter.

"Our team is very encouraged by the significant progress we are making. We recognize the challenges that lie ahead and remain fully committed to delivering our plan," Chief Executive Officer Alan Mulally said in a statement.

Dearborn-based Ford reported revenue of $44.2 billion for the quarter, a

5.5 percent gain over the $41.6 billion reported in the year-ago period.

Ford said its automotive sector made $378 million for the quarter, compared with a pretax loss of $716 million during the second quarter of last year.

Although its core North American operations showed improvement, they still posted a pretax loss of $279 million. That compares with a pretax loss of $789 million a year ago.

The company reported cost reductions of $600 million for the quarter, or $1.1 billion for the full year, primarily due to health-care cost concessions negotiated with the United Auto Workers, the reduced work force and lower warranty repair costs.

It also reported that its U.S. market share rose to 15.6 percent for the quarter from 15.1 percent in the first quarter. The share had been dropping. It was 16.7 percent in the second quarter of 2006.

Ford's Premier Automotive Group, which includes Jaguar, Land Rover and Volvo, reported a pretax profit of $140 million for the quarter, an improvement over the pretax loss of $162 million for the same period in

2006. The company said all brands improved. The profit comes at a time when all three are under consideration for sale as Ford tries to raise cash needed to fund its restructuring plan.

Argus Research Corp. senior automotive analyst Kevin Tynan said analysts were off in their earlier assessments because they were looking at a wide band of estimates for Ford, but added that the automaker still hasn't turned the corner to profitability.

"The $279 million loss in North America is still a problem," Tynan said.

Operating profit from Premier Automotive Group is a good sign "but essentially all of those brands are on the block and up for sale," Tynan said. "Going forward, you will be eliminating that profit."

Other signs of lingering trouble is the drop in Ford Motor Credit's profit from last year's second quarter and the already massive restructuring of Ford in North America, he added.

"Ford has driven a lot of the costs out of the system already and it's still not profitable," Tynan said. "It really does get more difficult from here. The easy costs are already out. Now, if you need more cost-reduction, especially in North America, where do you get them?"

The automaker's Asia Pacific and Africa unit made a pretax profit of $26 million, and Ford made $255 million pretax in South America. In Europe, Ford made $262 million, and its financial services arm turned a pretax profit of $105 million, down from $425 million in the same quarter last year.

Associated Press Writer Corey Williams in Detroit contributed to this report.

formatting link

Reply to
Michael Johnson
Loading thread data ...

Michael Johnson wrote in news:BemdnfgIPsCKOjXbnZ2dnUVZ snipped-for-privacy@giganews.com:

reductions

excluding

Read the same thing in this morning's business section. I take the whole thing as a fairly successful belt tightening. Mulally's done ok in that arena so far, but that pre-tax loss still looms large. And there's that "no profit until '09" thing as well.

Now that they've trimmed the fat, it's time to concentrate on product. If Ford doesn't simply start selling more vehicles, they will be in extremely hot water. Having already gone on a major diet, the company will have no choice but to look for profit $$ from sales. And sales come from great product.

Reply to
Joe

I think what may mean the most from what I read was that they increased market share from Q1 to Q2 this year. While it was only 0.5% it is a start. It also looks like they are shaking off some of the UAW weight too.

Reply to
Michael Johnson

well the problem is that the people running the auto companies are accountants and not familiar with building cars. Unless and until they put someone in charge that knows something about cars besides how to sit in them they will lose money. To a large degree too the stockholders are to blame. They want profit now not 2 years from now. As soon as we manage manufacturing like it was a business to last, instead of a quick buck the situation in Detroit will stay in the same profit area.

The cars from each manufacturer were unique, not it is hard to tell a ford from a Chevy from a Cadillac from a Volvo. it used to be that each car had it's own style then the accountants wanting a quick profit made them all look the same. This was the beginning of the decline in US auto companies.

Nothing will change until the stock holders wise up and elect a CEO that knows how to build a desirable car.

Reply to
Les Benn

nope, profit was all european. USA still in the red,

Reply to
Dear Leader

no they are not, it was Ford Leadership that caved in to the unions long ago and gave them too many bennifits. Everybody knows this.

Nope, Detroit is hamstrung by the Unions, they had large rooms were Union workers would come in and sleep for a day, Detroit did not keep ahead on engine design, while the Japs are doing 4 valves a while back, Detroit stayed with 2. Snooze, and lost it.

that is only part of the problem, tooling, Unions, Costs, etc.

Reply to
Dear Leader

But they showed a profit in general. It beats bleeding all over the world. Plus they had cash from the sale of Aston Mrtin but even without that they made a profit. Considering the analysts expected a $0.35/share loss I can't see this as anything but good news for Ford.

Reply to
Michael Johnson

The beginning of the end was when they didn't think quality was all that important and then the big one was how bad they underestimated the savvy of the Japanese automakers. They have been playing catch-up ever since.

IMO, Ford's biggest problem is poor marketing. We have a 2003 Sable that has been a wonderful car. We got it loaded for less than $20k and it has performed very well. It is quick, dependable, roomy, gets decent mileage and is well optioned. Why Ford killed it off has to be one of the great mysteries of our time. That car had a following and millions of people who were potential repeat buyers. They have finally realized this mistake and are bringing it back. They need to do the same with the Cougar, Thunderbird, Escort etc. Do you think Toyota would kill off the Camry or the Corolla? Of course not, they have good marketing skills.

Ford already makes good cars that can compete with any Japanese brand. They just need to convince the buyers with good marketing.

Reply to
Michael Johnson

MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.