Ford has warned it will book a loss of $5 billion for the current quarter because of the coronavirus crisis.
Ben Klayman and Nick Carey reported the news for Reuters:
Ford Motor Co (F.N) said on Tuesday its second-quarter loss would more than double to over $5 billion from $2 billion in the first quarter due to the impact of the coronavirus pandemic, but added it had enough money despite the crisis to last the rest of 2020.
“We believe the company’s cash is sufficient to take us through the end of the year, even with no additional vehicle wholesales or financing actions,” Chief Financial Officer Tim Stone said in a statement.
But he called the current economic environment “too ambiguous” for the No. 2 U.S. automaker to give a full-year 2020 earnings forecast.
“There’s no denying the negative economic consequences of a pandemic,” Chief Executive Jim Hackett said on a conference call with analysts.
Bloomberg’s Keith Naughton wrote:
Ford Motor Co.’s sagging stock fell further after the automaker forecast a more than $5 billion second-quarter operating loss due to the coronavirus pandemic’s blow to the global car industry.
The projected deficit — which is about $2 billion worse than some analysts were anticipating — is based on Ford’s expectation for significant volume declines in every region. Ford shares, which already were down 42% this year at the close, ended the late trading session down 4.1%.
The economic crisis caused by the pandemic is devastating Ford’s efforts to recover from three consecutive annual earnings declines. Chief Executive Officer Jim Hackett’s execution of an $11 billion global reorganization was undermined last year by the botched launch of the Explorer sport-utility vehicle. Before the coronavirus hit, Hackett was counting on a raft of new models to start reversing the company’s fortunes.
Jordyn Grzelewski from the Detroit News reported:
“Ford people are keeping each other safe, limiting the spread of the virus, safeguarding health care workers and first responders, and taking care of customers,” CEO Jim Hackett said in a statement. “The imagination, initiative and execution of our team is helping save lives today, and those qualities will allow Ford to emerge from this as a stronger company.”
In March, the automaker quickly shifted gears from assembling cars, trucks and SUVs to producing badly needed medical supplies. The company, along with the United Auto Workers and Ford’s medical and manufacturing partners, has committed to producing hundreds of ambulances, millions of face shields, 50,000 ventilators and up to 100,000 respirators, among other products.
Ford shares closed up more than 4% Tuesday at the close of trading, ending the session at $5.38 per share. But year-to-date, shares in the Blue Oval are down more than 40% from $9.42 per share at the beginning of the year.