Ford reports loss of $800 million in first quarter
DEARBORN, Mich. (AP) – Ford Motor Co. on Wednesday reported a loss of $800 million in the first quarter, as sales fell and the company absorbed a big charge for a change in accounting standards. The loss before the charge was smaller than Wall Street expected, however. Chairman and chief executive Bill Ford Jr. said the results show the nation’s second biggest automaker is “heading in the right direction” and said Ford expects to meet or surpass its earnings target for the year.
Ford lost 45 cents a share in the January-March period in contrast to a profit of $1.06 billion, or 56 cents a share, a year ago. Revenue fell 6 percent to $39.86 billion from $42.45 billion a year earlier.
Excluding a $708 million non-cash, after-tax charge for transition to a new accounting standard, Ford’s loss was $108 million, or 6 cents a share.
The consensus forecast of analysts polled by Thomson Financial/First Call was that Ford would lose 15 cents a share before charges. Ford now believes it can turn a profit by the end of the year, its chief financial officer said.
“We are committed to at least break even, but beyond this … we are now comfortable with the consensus estimate of 11 cents (earnings per share) for the full year,” Martin Inglis said during a conference call with securities analysts and reporters.
The automaker’s worldwide automotive operations lost $310 million in first quarter, compared to a profit of $748 million a year ago.
Ford cited higher marketing costs and lower production for a $430 million first quarter loss for its North American automotive operations. During the first quarter of 2001, the unit earned $754 million.
The automaker reported its marketing costs as a percentage of revenue rose to 15.7 percent from 12.2 percent during the first quarter of 2001. Ford’s U.S. market share fell in the first quarter to 20.7 percent from 22.6 percent in the first quarter of 2001.
Ford announced in January that a restructuring plan that calls for closing at least five plants and reducing its work force by 35,000 employees.
“Our first-quarter performance shows that our revitalization plan efforts are taking hold, and we are heading in the right direction,” its chairman and chief executive said in a statement. “While there is still a great deal of uncertainty in our industry, the general economic climate is improving, and we are on schedule to meet or surpass our 2002 earnings milestone,” Bill Ford said.
Ford Credit, the automaker’s financial arm, reported it earned $242 million in the first quarter, down from $406 million a year ago.
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