NYCshopper
01-25-2007, 09:40 AM
Ford reports record net loss of $12.7 billion in 2006
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070125/UPDATE/701250428
DEARBORN -- Ford Motor Co. announced today that it lost more than $12.7 billion last year, the biggest annual loss in the company's 103-year history.
Before today, Ford's worst year had been 1992, when the company reported a loss of $7.4 billion. Today's figure not only dwarfed that grim sum, but also surpassed the $10.6 billion loss rival General Motors Corp. reported last year for 2005.
As was the case with GM, most of Ford's loss was due to non-recurring charges stemming from its North American restructuring campaign. If that helps get the struggling automaker back on track, analysts will see it as money well spent.
"We began aggressive actions in 2006 to restructure our automotive business so we can operate profitably at lower volumes and with a product mix that better reflects consumer demand for smaller, more fuel efficient vehicles," said Alan Mulally, Ford's president and chief executive officer. "We fully recognize our business reality and are dealing with it. We have a plan and we are on track to deliver."
Excluding one-time charges, Ford's full-year after-tax loss from continuing operations was $2.8 billion, or $1.50 per share, excluding special items. Fourth-quarter after-tax loss from continuing operations of $2.1 billion, or $1.10 per share, excluding special items.
A year ago, Ford reported a 2005 operational loss of $1.9 billion after taxes. The company has already said it will not return profitability until 2009.
For the fourth quarter of 2006, Ford posted a net loss of $5.8 billion, up dramatically from the $74 million fourth-quarter loss reported a year ago.
Wall Street knew this was coming, but the full magnitude of the blow was still slightly larger than anticipated. As of Wednesday night, analysts were expecting an after-tax operational loss of $1.35 per share, according to a survey by Thomson Financial Network.
"Everyone knew it was going to be bad. It is bad," said bond analyst Bradley Rubin of BNP Paribas. "It's not affecting spreads."
Equity analysts were not expecting much drama either.
"We do not see much downside for Ford shares, given soft financial targets outlined through 2009," said Jon Rogers of Citigroup before the final numbers were announced. "Upside from current share price levels could result from advanced restructuring expectations and trimming the timeline to profitability."
Ford ended the year with $46 billion in automotive liquidity, including recently negotiated credit facilities.
Ford has been struggling with declining market share in North America - partly due to foreign competition, partly due to a more fundamental shift in the marketplace.
"Ford's finances were wrecked by the collapse in volume and pricing of its most profitable truck models," said David Healy of Burnham Investment Research. "Buyers realized that these metal monsters were only marginally more useful than crossover SUV's at half to two-thirds the price. At the same time, the threat of new competition for Ford's vital F-Series pickup trucks caused a sharp reduction in volume, yet the full competitive effect of GM's and Toyota's new full-sized pickups are still to be felt."
Ford has already slashed production to match this reduced demand for its vehicles.
In September, Bill Ford Jr. stepped down as CEO and tapped Mulally - a former Boeing Co. executive - to lead a sweeping turnaround of Ford's global operations. As part of that plan, Ford is cutting some 44,000 jobs in the United States and plans to idle 16 factories by 2012.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070125/UPDATE/701250428
DEARBORN -- Ford Motor Co. announced today that it lost more than $12.7 billion last year, the biggest annual loss in the company's 103-year history.
Before today, Ford's worst year had been 1992, when the company reported a loss of $7.4 billion. Today's figure not only dwarfed that grim sum, but also surpassed the $10.6 billion loss rival General Motors Corp. reported last year for 2005.
As was the case with GM, most of Ford's loss was due to non-recurring charges stemming from its North American restructuring campaign. If that helps get the struggling automaker back on track, analysts will see it as money well spent.
"We began aggressive actions in 2006 to restructure our automotive business so we can operate profitably at lower volumes and with a product mix that better reflects consumer demand for smaller, more fuel efficient vehicles," said Alan Mulally, Ford's president and chief executive officer. "We fully recognize our business reality and are dealing with it. We have a plan and we are on track to deliver."
Excluding one-time charges, Ford's full-year after-tax loss from continuing operations was $2.8 billion, or $1.50 per share, excluding special items. Fourth-quarter after-tax loss from continuing operations of $2.1 billion, or $1.10 per share, excluding special items.
A year ago, Ford reported a 2005 operational loss of $1.9 billion after taxes. The company has already said it will not return profitability until 2009.
For the fourth quarter of 2006, Ford posted a net loss of $5.8 billion, up dramatically from the $74 million fourth-quarter loss reported a year ago.
Wall Street knew this was coming, but the full magnitude of the blow was still slightly larger than anticipated. As of Wednesday night, analysts were expecting an after-tax operational loss of $1.35 per share, according to a survey by Thomson Financial Network.
"Everyone knew it was going to be bad. It is bad," said bond analyst Bradley Rubin of BNP Paribas. "It's not affecting spreads."
Equity analysts were not expecting much drama either.
"We do not see much downside for Ford shares, given soft financial targets outlined through 2009," said Jon Rogers of Citigroup before the final numbers were announced. "Upside from current share price levels could result from advanced restructuring expectations and trimming the timeline to profitability."
Ford ended the year with $46 billion in automotive liquidity, including recently negotiated credit facilities.
Ford has been struggling with declining market share in North America - partly due to foreign competition, partly due to a more fundamental shift in the marketplace.
"Ford's finances were wrecked by the collapse in volume and pricing of its most profitable truck models," said David Healy of Burnham Investment Research. "Buyers realized that these metal monsters were only marginally more useful than crossover SUV's at half to two-thirds the price. At the same time, the threat of new competition for Ford's vital F-Series pickup trucks caused a sharp reduction in volume, yet the full competitive effect of GM's and Toyota's new full-sized pickups are still to be felt."
Ford has already slashed production to match this reduced demand for its vehicles.
In September, Bill Ford Jr. stepped down as CEO and tapped Mulally - a former Boeing Co. executive - to lead a sweeping turnaround of Ford's global operations. As part of that plan, Ford is cutting some 44,000 jobs in the United States and plans to idle 16 factories by 2012.